Types of Car Insurance

In India, there are various types of car insurance, each offering different levels of protection to suit your requirements. Let's learn about each type in detail to help you find the one that best meets your coverage and needs.

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Three Types of Car Insurance in India

Primarily, there are 3 types of car insurance available in India:

1. Third Party Insurance

   Third party car insurance or liability only policy is the minimum coverage required by motor laws in India. It covers bodily injuries/death and property damages caused to others in an accident involving your insured vehicle. This policy pays for hospital bills and treatment of third parties, repairs for their damaged vehicle, and death liabilities.

2. Own Damage Insurance

   A standalone own damage policy offers coverage for damages to your own car in an accident. You can opt for this optional coverage along with third party insurance to cover damages to your own vehicle.

3. Comprehensive Insurance

   Comprehensive car insurance offers the most exhaustive coverage for car owners. It covers both damages to your car and third party liabilities. This type of car insurance policy offers complete protection against financial and legal responsibilities associated with operating a car.

Own Damage vs Comprehensive vs Third Party Insurance

The table below shows the coverage offered by different types of car insurance policies in India:

Types of Car Insurance Add-on Covers

Add-ons in car insurance are additional covers that enhance the protection of your insured car. You can choose among the following add-ons for an extra premium and expand your coverage:

1. Zero Depreciation Cover

   Zero depreciation is an add-on that ensures that the cost of depreciation is not deducted during claim settlement. Also called nil depreciation or bumper-to-bumper insurance, this add-on is available for cars up to 10 years old.

2. Engine Protection Cover

   This add-on protects your car's engine against damage from water ingression, oil spill, and electrical or mechanical breakdown. This add-on covers the replacement cost of the car's engine or its parts.

3. Roadside Assistance Cover

   Roadside Assistance coverage offers car owners help in case of car breakdowns. Services include flat tyre changes, minor repairs, towing, fuel delivery, key or lock replacement, and battery jumpstarts.

4. Return to Invoice (RTI) Cover

   The RTI cover enables car owners to receive the original invoice value of their car in case of total loss or theft.

5. Consumables Cover

   This add-on covers the replacement cost of items damaged in an accident. These include nuts & bolts, lubricants, washers, engine oil, brake oil, oil filters, and other small parts.

Factors Affecting Car Insurance Premiums

Car insurance premiums are influenced by a variety of factors as mentioned below:

• Type of Car: The make, model, age, and safety features of a car significantly affect the car insurance premium. Generally, high-performance and luxury cars incur higher insurance costs.
• Driving Record: The driving history of the driver is another crucial factor that impacts car insurance premiums. A clean record with no accidents or violations typically results in lower policy premiums.
• Location of Vehicle Registration: The area where you reside is an important consideration for car insurers. Areas with higher rates of accidents and vehicle theft often have higher car insurance premiums.
• Type of Policy: The type of car insurance coverage you choose also impacts your premium amount. A comprehensive plan costs more compared to third party liability insurance.
• Insured Declared Value (IDV): IDV is the current market value of the insured car. The higher your car’s IDV, the higher its insurance premium.