Car Insurance

Key Features of Car Insurance Policy

*TP insurance price for less than 1000cc engines. **All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard terms and conditions apply.

What is Car Insurance?

A car insurance policy is an contract between you and your insurance company where the insurer financially and legally protects your vehicle against own damages and third-party liabilities for a nominal premium. You can easily buy car insurance online with attractive benefits like cashless garages and 24x7 roadside assistance.

Many car insurance policies offer a Personal Accident (PA) cover that compensates for accidental injuries, disability, or death of the owner/driver. Besides, a valid car policy can also help you avoid hefty traffic fines. You can compare and buy comprehensive car insurance, third-party insurance, and own-damage car insurance online from multiple insurers at affordable premiums.

Top Reasons to Buy Car Insurance Policy Online

A car insurance policy offers the following essential benefits to vehicle owners that help protect them both financially and legally:

• Legal Requirement: Car insurance is compulsory under the Motor Vehicles Act of India. All vehicle owners need third-party coverage to drive on public roads. While this is the basic required coverage, you can opt for comprehensive car insurance for enhanced protection.
• Third Party Liabilities: Car insurance policy offers protection against 3rd party injuries, fatalities, and property damages arising from road accidents by the insured vehicle. While it offers up to Rs. 7.5 Lakh coverage for property damages, there is no limit on death claims.
• Own-damage Protection: Own damage insurance or OD insurance covers accidental damages and losses to your own vehicle.
• Personal Accident (PA) Cover: The mandatory PA cover under car insurance provides financial protection to the insured in the unfortunate event of permanent disability or death from accidents.

Third Party Car Insurance vs Comprehensive Car Insurance

Here is a table comparing coverage offered under different types of car insurance policies in India

It takes a few minutes to buy or renew car insurance online. To get an instant quote, visit Policybazaar.com and enter your car details and contact information. Now, select the right car insurance policy that suits your requirements.

You May Also Read: Third Party Car Insurance vs Comprehensive Car Insurance

Third-Party Car Insurance Price List as per IRDAI

As per IRDAI the premium of car insurance is based on the car engine cubic capacity which are listed below.

Car Insurance Add-On Covers

Add-ons in motor insurance are additional covers that enhance the coverage of your existing policy. You can purchase these add-ons for an extra premium.

Let's explore car insurance add-ons and their benefits:

1. Zero Depreciation Cover

   While a standard car insurance policy excludes cover for vehicle depreciation, a zero-dep add-on provides this coverage. With this add-on, you do not have to pay for any depreciation during the claim.

   It is important to note that the zero dep cover applies to certain claims for cars less than 10 years old. The compulsory and voluntary deductibles still apply with the zero depreciation cover.

2. No Claim Bonus Protection Cover

   An NCB Protect cover helps save you up to 50% on car insurance renewal premium even if you raised a claim during a policy year. You can purchase this add-on along with a comprehensive insurance policy.

3. Engine Protection Cover

   A comprehensive car insurance policy provides extensive coverage, yet excludes damages to the engine itself. An Engine Protection cover safeguards your engine from damage due to oil leakage or water ingress, covering key components like the gearbox, engine parts, and differential.

4. Pay as You Drive Cover

   Pay as you drive car insurance is a form of Usage-Based Insurance (UBI) insurance model. It allows policyholders to reduce their own damage premium based on kilometres driven in a policy tenure. This add-on is ideal for individuals who drive occasionally or own more than one 4 wheeler.

5. Consumables Cover

   A Consumables Cover add-on financially safeguards the policyholder for the replacement of essential consumable parts. These small but critical parts include nuts, bolts, screws, AC gas, lubricants, filters, and much more.

6. Key Protection Cover

   Losing car keys can be a harrowing experience, which you can avoid with a Key and Lock Protect add-on cover. With this add-on, the insurer covers the costs of replacing and repairing keys under key protection cover.

7. Daily Allowance Benefit

   Daily allowance add-on comes to the rescue when your vehicle is being repaired in the garage after an accident. Under this add-on, the insurer provides a daily travel allowance if the damaged four wheeler is in the garage for more than 3 days.

8. Personal Accident Cover

   The personal accident cover compensates if the owner-driver suffers injuries, permanent/partial disability or death in an accident. It is included in comprehensive insurance by default. But if you have only third-party insurance, you will have to purchase it as an add-on.
   Additionally, extended personal accident coverage for co-passengers is also available, subject to pre-determined limits.

9. Roadside Assistance Cover

   The RSA cover or Roadside Assistance cover is the emergency helpline service provided by the insurance provider. Under this cover, the insurer provides you with assistance in case of a breakdown or other failures. Your insurance company sends a mechanic to your location to fix the damage to your four wheeler. Since insurers do not count Roadside assistance coverage as a claim, it will not affect your NCB

10. Return To Invoice Cover

    Under the Return to invoice add-on cover, the insurer covers your 4 wheeler's original invoice amount in the event of theft or total loss. This includes the ex-showroom price, road tax, and first-time registration charges.

11. Personal Baggage Cover

    With Personal possession add-on cover, you get the coverage if your personal possessions get damaged in an unfortunate event or stolen when your four-wheeler is parked in authorised parking. The coverage amount is limited and varies from insurer to insurer.

12. Tyre Protection Cover

    Comprehensive insurance policy excludes tyre or tube damages in an unfortunate accident. A Tyre Protection cover financially protects against accidental damages to tyres or tubes.

13. Driver and Passenger Cover

    Under this add-on, you get coverage in case any of the drivers or passengers get injured in the accident. The insurer will provide financial aid for medical expenses.

List of Car Insurance Companies in India 2025

Here is the list of car insurance companies in India including their claim settlement ratio and the number of network garages they cover:

How To Choose Right Car Insurance Policy?

While buying car insurance online, consider these factors to get the right coverage at the best price:

• Pick an Appropriate Policy Coverage: While third-party insurance is sufficient to avoid traffic fines, a comprehensive policy offers complete protection to you and your vehicle.
• Check the Insurer Claim Settlement Ratio (CSR): Knowing the insurer's claim settlement ratio is important. A higher CSR means greater chances of your claims being settled.
• Check for Cashless Garages in Your City: Choose an insurer with an extensive network of cashless garages. It will broaden the scope of availing of a cashless repair facility without paying cash from your pocket.
• Know the Claim Process: Go for an insurance company with an easy claim process, 24x7 claim support, and a faster claim settlement.
• Select the Suitable IDV: Choose the IDV that matches your car's market value. While a lower IDV can help you save on your premium costs, you may incur higher out-of-pocket expenses during claims. You can also use an IDV calculator online to get the right IDV for your car.
• Compare Car Plans Online: Compare multiple 4-wheeler insurance plans online to find the best-suited plan within your budget. You can also visit Policybazaar.com to thoroughly compare car insurance plans.
• Customer Assistance: An insurance company that offers 24x7 customer assistance is essential. This will help you to settle your queries and claims at your convenience.

You May Also Read: How to Choose Right Car Insurance Policy

Should You Buy/Renew Car Insurance Online or Offline?

Car insurance renewal online is more convenient because it provides transparency and saves a lot of time. Doing so prevents you from getting influenced by any agent and buying an unsuited policy. The table below outlines the major differences between buying/renewing car insurance online and offline:

Benefits of Buying Car Insurance Online

Buying car insurance online comes with the following benefits:

• Instant Quotes and Easy Buying: Buying car insurance online is quick and can be done from the comfort of your home. Simply enter your car details on Policybazaar.com, compare quotes from across 22 insurers, pick the most suitable plan, and instantly receive your car insurance policy.
• Lower Premiums: Purchasing 4 wheeler insurance is more affordable online than offline. Insurers save on operational costs online and, thus, charge lower premiums.
• Easy to Compare: You can easily compare car insurance plans from different insurers online, which is impossible offline. Policybazaar.com allows you to compare plans from multiple insurers so you can buy the right plan that fits your needs and budget.
• Zero Paperwork: You can buy car insurance online with minimal or zero paperwork. You don’t need to fill out several physical forms to purchase the policy. Instead, you just need to fill out a short online form and pay the premium to get the policy issued.
• Easy to Check Insurer’s Credibility: You can also go through an insurer’s online customer reviews, claim settlement ratio and incurred claim ratio to check its credibility.

How to Buy or Renew Car Insurance Online?

Buying or renewing car insurance online is quick and hassle-free process that ensures continued coverage for you and your four-wheeler. Just follow this simple procedure to quickly renew car insurance online:

• On the homepage, click the 'Car Insurance' tab.
• Enter you car's registration number and other required details.
• Among various insurance quotes, choose the one that suits your coverage requirements.
• Select any riders or add-on covers that you require.
• You will now see the premium amount you need to pay.
• Pay the insurance premium online via available payment methods.
• Once the payment is complete, you will receive your policy documents at your registered email ID.

Documents Required to Avail Car Insurance Online

You do not need any documentation or paperwork when you purchase or renew car insurance online from Policybazaar.com. However, there are some details that you will need to have handy during the process. These include:

• RC - Owner name, make/model/variant, engine no., chassis no., engine’s CC, fuel type, vehicle class, during the inspection
• Previous Year Policy - NCB, insurer name, policy no, the policy period, Add-on info, during the inspection
• KYC - Pan Card/Aadhar/DL/Voter ID/Form 16/Passport

Why Should You Renew Car Insurance Online?

Car insurance policies have a validity and need to be renewed for continued coverage. Here are some major benefits of online car insurance renewal:

• Easy Comparison: When you renew car insurance online, you can easily compare plans offered by multiple insurers. This will help you understand the additional services available, such as self-video claims, a free pick-up and drop facility, cashless assurance, and 3-day repair assistance.
• Seamless Customisation: You can easily modify the coverage of your car insurance policy during renewal by adding or removing add-ons. However, before tailoring your policy with an add-on cover, remember that your insurance premium depends on it.
• Easy to Switch the Insurer: If you are dissatisfied with your current insurer or want to enhance your policy coverage, you can switch car insurer at the time of renewal. Moreover, if you find another insurer offering better features, then you can do so from the comfort of your home.
• Secured & Transparent: Secured payment gateways make car insurance renewal a safe and transparent process. Premium payment can easily be done using credit cards/debit cards/and UPI.

How to Calculate New Car Insurance Price Online?

The IRDAI decides the third-party insurance rates for all 4 wheelers based on their engine capacity. Here are two ways to calculate the own damage premium for a new car:

1. Using Car Insurance Calculator

The easiest method to calculate the insurance amount for a new car is to use a Car Insurance Premium Calculator. Simply visit the calculator on Policybazaar.com and enter four-wheeler details like make, model, variant, and ex-showroom price. The calculator will calculate the estimated new car insurance price along with the IDV.

2. Calculating New Car Insurance Cost via Formula

An OD insurance premium for a new 4 wheeler can also be calculated by using the following formula:

OD Premium = IDV * Premium Rate (decided by the insurer) + Add-Ons - Discount & benefits (no claim bonus, theft discount, etc.)

IDV or the Insured Declared Value can be calculated by using the following formula:

Insured Declared Value = (Current market value - the depreciation value) + (Cost of accessories - their depreciation value)

Factors Affecting Car Insurance Premium

Several factors affect car insurance prices. You can easily check your insurance premium using an online car insurance premium calculator. However, the insurance provider takes into consideration the following parameters before fixing the car insurance premium

• Type of Policy: The car insurance price is decided based on the type of coverage you opt for. Basically, third-party insurance carries the lowest premium as it only covers third-party damages. The premium becomes higher if you purchase own damage or comprehensive insurance.
• Personal Accident Cover: Both third-party and comprehensive car insurance policies include PA cover, with a coverage of up to Rs. 15 Lakh. You can purchase this cover by paying a nominal extra premium.
• Insured Declared Value (IDV): IDV, the current market value of the insured four wheeler, significantly affects car insurance premiums. It is the maximum amount a policyholder receives in case of a total loss. The higher the IDV, the higher its insurance premium.
• Make & Model: 4 wheeler’s make and model significantly affects its insurance premium. Typically, insuring high-end models costs more than base models because of the higher costs of part repair or replacement.
• Fuel Type: Repairing diesel or CNG cars is more expensive than petrol variants. As a result, petrol car insurance premiums are lower than for other fuel types.
• Location: The geographical location of the insured 4 wheeler also impacts the final cost of its policy premium. Usually, the premium is higher in metropolitan cities because of denser traffic and, consequently, higher chances of accidental damage.
• Year of Manufacture: The manufacturing year of the four wheeler is also considered when deciding the insurance premiums. Insuring newly launched four-wheelers can be expensive since their spare parts might not be available in the market.
• Add-on Covers: Enhancing the policy coverage with an add-on cover will increase the premium. However, these add-ons can only be purchased with comprehensive insurance.
• Claim History: If the policyholder has not filed claims during the policy term, the insurer provides a No Claim Bonus. This reward can be used to reduce the policy premium at the time of car insurance renewal.

Tips to Reduce Car Insurance Premium

Lowering your car insurance premium without compromising coverage requires understanding the factors that affect policy costs. Below are some helpful tips you can follow to save on your premium while ensuring optimum coverage.

1. Compare Car Insurance Plans

   Car insurance premium rates vary based on the coverage options and benefits the insurer offers. Hence, you should compare car insurance policies online to get your policy at a cost-effective premium. Doing this lets you choose the one that best meets your coverage requirements and suits your budget.

2. Install Anti-Theft Devices

   Another way to save on your car insurance premium is to install an anti-theft device in your four-wheeler. However, it should be ARAI (Automotive Research Association of India) certified.

   An anti-theft device enhances your 4 wheeler’s security and minimises its theft chances. Moreover, insurers provide up to 2.5% or Rs. 500 discount on your car insurance premium, making it more affordable.

3. Avoid Modifications

   It is important to understand how modifications affect car insurance premiums. Every modification done to your four-wheeler increases its value and, in turn, its premium cost. Hence, you must not make any unnecessary modifications to avoid high car insurance premiums.

4. Choose the Right Add-Ons

   You should take some time to identify the add-on covers tailored to your vehicle's type and requirements. It ensures optimum coverage and helps lower your overall insurance premium. You may consider some beneficial add-ons such as zero deprecation, roadside assistance, and engine protection for a great driving experience.

5. Avoid Small Claims

   You should not make claims for minor damages since they are not expensive to repair. Paying out-of-pocket for repairing such damages will keep the NCB discount valid for your next car insurance renewal, ultimately lowering your policy premium.

6. Opt for Pay as You Drive (PAYD) Insurance

   Pay as you drive or pay as you go insurance is usage-based car insurance. Under this, you pay the policy premium only for the number of kilometres you drive. Hence, if you don't drive frequently or long distances, you should opt for PAYD car insurance to save on your policy premium.

7. Avoid Policy Lapse

   If you renew car insurance after its expiry, it leads to a policy lapse. It, in turn, increases the renewal premium and voids NCB. So, you should get your car insurance renewal on time to avoid hefty premium amounts.

How to Buy New Car Insurance Online?

To buy new car insurance online from Policybazaar.com, follow the simple steps given below:

• Click the 'Car Insurance' tab on the homepage and select ‘Brand New Car.’
• Select make, model, variant, fuel type, and registration year.
• Fill in the registration form and proceed further.
• Now, from the list of various insurance plans of the car insurance companies, choose the one that meets your coverage requirements and budget.
• You can also modify the options from the ‘Add-ons’ section per your requirement. However, you can only purchase add-ons if you buy a comprehensive plan.
• Now, make the payment online via debit/credit cards, UPI, or net banking.
• After payment, the insurer will send the policy documents to your registered email ID.

Why Should You Renew an Expired Car Insurance Policy Now?

Here are the top 4 reasons why you must renew your expired car insurance policy now:

1. Legal Consequences

   Driving an uninsured 4 wheeler is a punishable offence in India. If caught without a valid insurance policy, you could incur fines of up to Rs. 4,000 and face imprisonment

2. No Available Coverage

   If your four-wheeler insurance has expired, you do not get policy coverage and cannot raise a claim. Even if you raise a claim with an expired policy, your insurer will reject such a claim, and you will have to bear the repair costs from your pocket.

3. Loss of NCB

   If you do not renew your expired car policy within 90 days, you will lose your No Claim Bonus benefit.

4. 4 wheeler Inspection

   A four-wheeler with an expired policy may have to undergo a mandatory inspection before renewal. If the insurer finds it ill-maintained and in bad shape, it may lead to a higher premium.

How to File a Car Insurance Claim?

It is critical to understand the car insurance claim process, as your insurer can reject your claim for many reasons. Follow the below-mentioned steps to raise a valid car insurance claim conveniently:

Step 1: Raise a claim request: Immediately share details of the accident with your insurer after the accident occurs. Make sure you document and share photographic evidence to support your case.

Step 2: Damage Assessment: After the claim registration, the insurer sends a surveyor for damages evaluation. Now, you will need to keep the required documents handy for claim verification.

Step 3: Repair: Once the inspection is complete, you can send your 4 wheeler to a network garage for repairs.

Step 4: Claim Settlement: With a cashless claim, the insurer will directly settle the repair bills with the network garage. However, for a reimbursement claim, you will need to pay the bills first and then ask your insurer for reimbursement.

Documents Required for Filing a Car Insurance Claim

Whether it is theft, an accident, or third party damages, the insurance company requires several documents at the time of claim. Mentioned below is the list of different documents that you would require when registering a claim:

• Duly filled and signed claim form
• KYC
• Copy of insurance policy
• Copy of RC
• Licence copy of the driver.
• Copy of Police FIR in case of theft claims
• Original repair bills and payment receipts
• Estimated repair bills

Tips to Avoid Car Insurance Claim Rejections

Here are some essential tips that will help you avoid car insurance claim rejections:

1. Declare Modifications

   Inform your insurer as soon as you make any modification to your four-wheeler. If you fail to do so and the insurer learns about it during the claim process, they may reject it.

2. Renew Policy on Time

   If you forget to renew your policy before the expiry date and raise a claim after that, your insurer will reject that particular claim. Therefore, make sure to renew your car insurance policy before the expiry date.

3. Keep Documents Handy

   Your insurance provider may reject your claim if you don't have any of the mandatory documents. Thus, you must keep all the relevant documents handy at the time of raising a claim.

4. Read Policy Terms and Conditions

   Read your policy terms and conditions thoroughly at the time of policy purchase for a hassle-free claim settlement and avoid any claim rejections.

5. Carry a Valid Driving Licence

   A motor insurance claim can also get rejected if the driver was found without a valid licence at the time of the accident. Thus, ensure that you have a valid driving licence while driving on Indian roads.

6. Declare the Right NCB

   If you mistakenly declare an incorrect NCB when buying or renewing your policy, the insurer may reject any claims you make. Therefore, you must declare the right NCB when purchasing a policy.

How to Download Your Car Insurance Policy Copy Online?

When you purchase car insurance online, your insurer sends your policy documents to your registered address. Moreover, you also receive a digital copy of your policy on your email address. However, if you lose your policy documents, you can download your policy copy from Policybazaar Insurance Brokers Private Limited. Here are the steps:

• Visit Policybazaar.com and select the ‘Sign in’ tab
• You can sign in via OTP or by entering your password
• You will now be redirected to your account dashboard
• From the "Your Policies" section of your account, download your policy copy online.

Car Insurance Terminologies You Need to Know

Check out some of the commonly-used car insurance terminologies:

1. IDV

   IDV or Insured Declared Value is the current market value of the insured four-wheeler. If it suffers total loss, IDV is the compensation that the insured person will get from the insurer.

2. Premium

   Premium is the amount the vehicle owner pays to the insurer in exchange for financial protection of the four-wheeler.

3. No Claim Bonus

   No Claim Bonus or NCB is a discount on the motor insurance renewal premium. This reward is given by the insurer to the policyholder for safe driving and not raising any claims in the previous policy year.

4. Zero Depreciation Cover

   Zero depreciation is an add-on cover in car insurance that prevents the depreciation deduction on the four-wheeler and its parts during claims.

5. Own Damages

   Damages from an accident, natural calamity, fire, man-made disaster or burglary.

6. Personal Accident Cover

   Personal accident cover provides compensation to the owner-driver in case he/she becomes disabled or dies in an accident.

7. Cashless Claims

   These claims are filed when the insured 4 wheeler is taken for repair at a network garage authorized by your insurer.

8. Voluntary Deductible

   A voluntary deductible is the amount the policyholder chooses to pay out of pocket when making a claim.