Coverfox.com
  • Insurance
    • Car
      • Car Insurance
      • Companies
      • Third party car insurance
      • Comprehensive car insurance
      • Car insurance calculator
      • New car insurance
      • Zero Dep Car Insurance
      • Buy Car Insurance
      • Compare Car Insurance
      • Car Insurance Articles
      • Cashless Garages
    • Bike
      • Two Wheeler Insurance
      • Two Wheeler Insurance Companies
      • Two Wheeler Insurance Claim
      • Two Wheeler premium Calculator
      • Third party Bike insurance
      • Multiyear Bike Insurance
      • Bike Insurance Articles
    • Health
      • Health Insurance
      • Companies
      • Mediclaim Policy
      • Individual Health Insurance plans
      • Critical illness insurance
      • Senior citizen health insurance
      • Arogya sanjeevani policy
      • Coronavirus Health insurance
      • Health Insurance Articles
      • Network Hospitals
    • Term
      • Term Insurance
      • Companies
      • Life insurance
      • Life Insurance calculator
      • Term Insurance calculator
      • Life Insurance Plans
      • 1 crore term insurance
      • Compare Term Insurance
      • Buy Term Insurance
      • Term Insurance Renewals
      • Term Insurance Articles
      • Life Insurance Articles
    • Investment
      • Investment Plans
      • Companies
      • Buy Investment Plans
      • Child Plans
      • Pension Plans
      • ULIP
      • Endowment Policy
      • Tax saving investment
      • Buy ULIP
      • Best ULIP
  • About Coverfox
    • About us
    • Insurance Blog
  • Claims
  • Contact us
  • Login
image title
CAR INSURANCE

How Does Car Insurance Work in India?

Jitendra Kaku 09 June 2020

Insurance companies in India offer only two types of car insurance as third-party insurance and comprehensive insurance. Let's check the difference between them and understand how car insurance works in India.

How Does Car Insurance Work in India?

Car insurance is a necessity for every car owner, and in the last five years, there have been many positive changes, which has made buying car insurance very easy and less time-consuming. For example, digitisation has simplified the process of purchasing car insurance online. But, despite this, many still find it too complex to understand the benefits and claim related processes.

Before we get into an overview of how car insurance works in India, you must know the significant changes made applicable from September 1st, 2018.

All insurance companies should offer only three-year third-party insurance for new cars and five-year third-party insurance for new two-wheelers.

Third-Party Car Insurance

Third-party car insurance is also known as legal liability insurance as it provides coverage against any legal liabilities, arising due to accidental damages caused to the third party i.e. person or property by the policyholder's vehicle. It does not provide coverage against damages caused due to accident or theft to the policyholder's car.

Third-party car insurance coverage includes:

  • An accident resulting in permanent injury/death of a person
  • Damages caused to the property, other than insured
  • Personal accident cover for driver/owner There is no limit on liability coverage on injuries or death of a third party, but liability coverage for third-party property damages is fixed at Rs 7.5 lakhs.

Comprehensive Car Insurance

Comprehensive car insurance is a combination of both first-party (own damage coverage) and third-party insurance and offers the highest form of protection to any policyholder for their car. In this type of car insurance, the insured is fully covered against any risk of loss arising out of damage due to accidents or theft of the car.

Comprehensive car insurance policy coverage includes:

  • Third-party injury or death
  • Damage to third-party property
  • Damage to your own vehicle arising out of accident, theft, man-made disaster or natural calamities
  • Personal accident cover for driver/owner

Factors Affecting the Car Insurance Premium

There are a lot of factors which go into determining the car insurance premium and the total coverage amount. In the case of third-party car insurance, the premium amount is determined by the Insurance Regulatory and Development Authority of India (IRDAI). The factors taken into consideration are the engine's cubic capacity along with many other points. The premium amount is revised every year. Following are the factors affecting the insurance premium of a comprehensive car insurance policy:

  • Insured Declared Value (IDV)

    The insured declared value (IDV) is the market value of your car calculated by your insurance company, depending on the car's age, make, model and engine's cubic capacity. It is the total amount that you shall receive in case of total damage or theft of your car. Higher the IDV of the car, higher will be the amount of premium and vice versa.

  • Safety and Security

    Safety device installations like an anti-theft alarm system, gear lock, steering lock, etc. help to lower the premium rate. All safety devices should be certified by a certification agency, like in India, it is Automotive Research Association of India (ARAI).

  • Claims History

    A claim-free year results in "No Claim Bonus", and in the next year car insurance renewal, it translates into a lower premium amount.

  • Add-ons on Car Insurance

    The premium amount also depends on the add-ons you have selected for enhanced car insurance coverage. For example, zero depreciation, roadside assistance, engine protection, passenger coverage, etc.

Making Car Insurance Claims

It is the most complicated part and often involves lengthy legal procedure. Let's check out how the claim filing process works for both the types of car insurance policies:

Third-Party Insurance

Under this, the claim can only be filed by a third-party against the policyholder. Since it only covers accidental damages, the third party has to file a first information report (FIR) with the nearest police station of the accident. It is followed by collecting the charge sheet. After that, the case will get lodged and heard in the Motor Accident Claims Tribunal and settled accordingly.

Here, the third party or the person making a claim has to do everything on his own, as the insurer will not help in the process. The insurer's liability is just to pay for the damages as determined by the tribunal due to policy.

Comprehensive Car Insurance Policy

For third-party claims under a comprehensive policy, the process is similar to third-party insurance. Now, for making own damages claim, the policyholder has to contact the insurance company to make a claim. If you have purchased car insurance online, you can file a claim on the insurance company website or mobile app.

Once the claim is intimated, the insurance company appoints a surveyor, who will inspect your car to determine the validity of the claim and extent of the damage. Once the surveyor gives a go-ahead, you can get the car repaired at a network garage through the cashless mode or at your own preferred garage and then get the costs reimbursed as per the surveyors approved amount.

Buying Car Insurance Online

Compared to any other modes, buying car insurance online offers multiple benefits to users. Following are some of the advantages of buying car insurance online:

Lower Premium Rates - As there is no broker involved in the transaction, the insurance company passes the benefits of the lower cost to the customer.

Easy Comparison - When you purchase car insurance online, you can easily compare the pros and cons of all plans and select the plan that offers maximum benefits.

Simple Documentation - As the documentation is handled electronically, there is no need for physical verification of the documents.

Online Services - The online platforms are not only limited to selling car insurance online but offer a range of online services such as renewal premium payment, filing claim request, tracking claim status, etc.

One of the major advantages of buying car insurance online is that you do not have to depend on anyone to complete all the insurance-related tasks. Additionally, it's hassle-free and less time-consuming, too.

Final Words

Car insurance works just like any other forms of insurance in India, "use it or lose it" policy. Therefore, before buying your car insurance online, compare every plan and make an informed choice, so that you get the maximum risk coverage from your car insurance.

Related Car Insurance Articles

  • Misunderstanding Your Voluntary Deductible In Car Insurance
  • Technology Remodeling The Motor Insurance Sector In India | Tips For Car Insurance Policy Renewal While Social Distancing
  • 5 Ways To Keep Your Car Insurance Cost Down | Best Way To Get Your Car Insurance Renewed During Covid Hardships
  • Dos And Donts Of Buying Car Insurance Online In India | Fine To Pay While Driving Without Car Insurance
  • How To Save Money On Car Insurance During Lockdown Period | Impact Of Covid 19 On Your Car Insurance
  • Irdai Withdraws Long Term Own Damage Cover For Motor Vehicle Insurance | Know About Car Insurance Policy Renewal Online
  • New Vehicle Insurance Rules In India Cars And Bikes Are Now Less Expensive | No Longer Need Physical Documents For Car Insurance
  • Pay Car Insurance Premium Only On The Distance You Travel | Smart Ways To Lower Your Car Insurance Premium
  • Validity Of Third Party Vehicle Insurance In India Extended Till December 2020 | What To Do If Car Insurance Premium Is Too High | Why It Is Important To Renew Car Insurance Despite The Lockdown
Insure your car in 5 minutes
Upto 75% discount.
expert assist 100% buying & claim support
express claims 3 Day Car Repair
Service
Rated 4.7/5

for Customer Satisfaction on Facebook
5,00,000+
Policies sold
last year
MUST READ
POPULAR OTHERS
General insurance claim settlement ratio of general insurance companies in 2022
Are Airbags covered under Car Insurance
Does Insurance Cover Your Vehicle’s Airbags?
Highway Hypnosis: What is it & ways to avoid it
What is Highway Hypnosis?
Risks Covered By The Comprehensive Car Insurance
Risks Covered By Comprehensive Car Insurance
How to claim car insurance for own damage caused to your vehicle?
How to claim car insurance for own damage?
How to Save Tax on Electric Vehicles
Tax Benefits on Electric Vehicles: All you need to know
  • Car Insurance Companies
  • Tata AIG Car Insurance
  • New India Car Insurance
  • Acko Car Insurance
  • ICICI Lombard Car Insurance
  • HDFC ERGO Car Insurance
  • Kotak Car Insurance
  • Most Insured Cars
  • Hyundai Car Insurance
  • Maruti Car Insurance
  • Honda Car Insurance
  • Force Car Insurance
  • Tata Car Insurance
  • Mahindra and Mahindra Car Insurance
  • Most Insured Models
  • Swift Dzire Car Insurance
  • Elite i20 Car Insurance
  • Vitara Brezza Car Insurance
  • Wagon R Car Insurance
  • Maruti 800 Car Insurance
  • Baleno Car Insurance
  • General Insurance Companies
  • National insurance
  • Oriental insurance
  • United India Insurance
  • Relience General Insurance
  • New India Assurance
  • TATA AIG General Insurance
  • Driving License
  • Driving License
  • Driving License Status
  • Driving License Renewal
  • Registration Certificate
  • Learning License
  • Delhi driving license
  • RTO
  • RTO
  • Uttar Pradesh RTO
  • Punjab RTO
  • Gujarat RTO
  • Madhya Pradesh RTO
  • Maharashtra RTO
icon Car Insurance icon Articles icon How Does Car Insurance Work In India
×

Get Lowest Rates for car Insurance

With Upto 75% Discount

  • Secure
  • Licensed By
  • Payment Options
  • Car Insurance
  • Bike Insurance
  • Motor Insurance
  • Commercial Vehicle Insurance
  • Car Insurance Premium Calculator
  • Family Health Insurance
  • Senior Citizens Insurance
  • Group Insurance
  • Corona Rakshak Policy
  • Corona Kavach Policy
  • Super Topup Plan
  • Term Insurance
  • ULIP
  • e-Term Plan
  • 1 Cr Term Insurance
  • कार इन्शुरन्स
  • टू व्हीलर इंश्योरेंस
  • टर्म इंश्योरेंस
  • हेल्थ इंश्योरेंस
  • मेडिक्लेम पॉलिसी
  • Learn About Insurance
  • Network Hospitals
  • Cashless Garages
  • Get Android App
  • Get iOS App
  • Learn
  • About Us
  • Contact Us
  • Careers
  • Sitemap
  • FAQs
Connect with us
Become a Partner
Become a Coverdrive POS Agent

Coverfox Insurance Broking Pvt. Ltd. : C Wing, 6111-6118, 6th Floor, Oberoi Garden Estate, Chandivali Farm Road, Chandivali, Andheri (East), Mumbai - 400072

Licence No. 478 , IRDA Direct Broker Code: IRDA/ DB 556/ 13 , Valid till: 26/12/2022, CIN: U66000MH2013PTC243810

  • Shipping & Delivery Policy
  • Privacy Policy
  • Cancellation & Refund
  • Terms & Conditions
Copyright © 2023 Coverfox.com. All Rights Reserved