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All-in-one Guide for Motor Insurance in India

Who Decides Motor Insurance Premium Rates?

Insurance Regulatory and Development Authority of India (IRDAI) decides the third party motor premium rates. However, own damage premium rates may differ from insurer to insurer.

Third-party Motor Insurance Premium Rates

The third party motor insurance premium rates are based on the vehicle’s engine capacity. The higher the capacity, the higher is the premium. IRDA decides the third party premium and it changes every year.

Here’s the premium price list for the FY17-18 as effect from 1st April’17:

Private carsPremium per annum
Not exceeding 1000cc Rs.2,055
Exceeding 1000cc but not exceeding 1500cc Rs.2,863
Exceeding 1500cc Rs.7,890
Two wheelersPremium per annum
Not exceeding 75cc Rs.569
Exceeding 75cc but not exceeding 150cc Rs.720
Exceeding 150cc but not exceeding 350cc Rs.887
Exceeding 350cc Rs.1,019

Comprehensive Motor Insurance Premium Rates

The premium for 'own damage' cover, of which the premium is higher than the third party insurance premium, is based on risk and damages to the insured vehicle.

The rates differ and are subjected to many factors such as:

  • Insured Declared Value or IDV
  • Geographical Location (Bike registration RTO)
  • Engine Capacity (CC)

Insured Declared Value (IDV): IDV is the current market value of your vehicle, not the resale value. The market value is dependent on the ex-showroom price and depreciation of the vehicle. IDV is the maximum value that an insurance company will reimburse at the time of claim.

Note: The Ex-showroom price is different than the on-road price. The on-road price includes road tax and other taxes.
Insured Declared Value calculation based on the Ex-showroom:

Vehicle AgeIDV
Between 0 - 6 Months 95% of Ex-showroom
Between 6 Months - 1 Year 85%
Between 1 Year - 2 Years 80%
Between 2 Years - 3 Years 70%
Between 3 Years - 4 Years 60%
Between 4 Years to 5 Years 50%

Note: The IDV for vehicles aged over 5 years is calculated vary from company to company. You may have to contact with the insurance company.

Geographical Location of the Vehicle Registration (RTO): Depending on the registration zone (RTO) of your vehicle the premium varies. The zones are categorised as Zone A and Zone B.

Zone A: Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Pune and Ahmedabad.

Zone B: Rest of India.

Depending on the Zone A or B, premium will vary. Vehicle owners who have registered their vehicle under Zone A will pay a slightly higher premium than the Zone B vehicle owners

Engine Cubic Capacity: Yes, the vehicle engine capacity is considered when deciding the premium of comprehensive motor plan. The thumb rule is higher the Engine CC higher the premium.

Multi - Year Motor Insurance Plan

Opt for a Multi-year policy to save money

Multi-year or long-term motor insurance policy means coverage for 2 or 3 years in a single policy. You don’t have to renew your vehicle insurance policy every year. Multi-year motor insurance policy helps you to save money, especially from every year hike in third party premium.

Multi-year Car Insurance:

So far, none of the motor insurance companies offer multi-year car insurance policy. However, they have recently agreed to offer long-term motor insurance policies for private cars. Even IRDAI hadn’t passed multi-year third party policy for motor cars.

Multi-year Two-wheeler Insurance:

IRDA allows insurance companies to sell multi-year two wheeler third party policy to their customers. You can now cover your two wheeler for 3 years straight in a single policy at a time. This way you can save money. And also, chances of a policy lapse are less.

How can You Save Money on Motor Insurance Policy

Automobile Association of India – You are eligible for 2.5% of discount on own damage premium, if you’re a member of the Automobile Association of India, approved by IRDAI.

Anti-theft device – Get up to 2.5% of discount on premium on installation of an anti-theft device as approved by IRDAI.

Voluntary Deductible Discount – Well, you can opt for voluntary deductible discount, means, opt to pay the minimum amount of money at the time of claim, and the insurance company offers pre-fixed percentage of discount on the own-damage premium. If you do not claim, you do not have to pay any money, plus you save money.

No Claim Bonus – If it’s time to renew your motor insurance policy, and you didn’t lodge claim in the previous policy tenure, you are entitled to No Claim Bonus, a discount on your own-damage premium. You can get up to 50% discount on the own damage premium, if you do not lodge claims for 5 consecutive years.

How to Renew Your Motor Insurance Policy?

Compare and Renew Motor Insurance Online

Renew your Motor Insurance Online:

If your motor policy is still in force, you can renew it instantly.

  • Compare motor insurance plans, choose the right type of policy for your vehicle.

  • Enter the basic vehicle details – make, model, and also vehicle registration detail.

  • Enter whether or not you have lodged any claims in the previous policy tenure, check if you are eligible to get No Claim Bonus. If you didn’t lodge any claim, you will get a discount.

  • Proceed to complete the process of renewal.

  • There is no need of inspection and documents, and you will receive your insurance policy instantly.

What Happens If Your Motor Insurance Policy Expires?

Renewal of Car Insurance after expiry:

  • Compare motor insurance plans, choose the right type of policy.
  • Contact the insurance company for the coverage.
  • Fix up an appointment with the surveyor for the inspection of your vehicle. If the insurance company accepts to offer you the insurance, you can make the payment and you will receive the policy.
  • The surveyor's insurance report is valid for only 24 hours. So, make sure if you choose to renew you pay the premium within 24 hours of the survey.

Renewal of Two Wheeler Insurance After Expiry:

You can simply renew the expired two wheeler insurance policy instantly.

  • Compare motor insurance plans, choose the right type of policy.
  • Enter the basic details and proceed to complete the process of renewal.
  • There is no need of inspection and documents, and you will receive your insurance policy instantly.

Renew expired two-wheeler insurance policy with Coverfox because:

  • There is no inspection: At Coverfox, you can renew your two wheeler expired policy without inspection and documentation, even if the policy has expired for more than the 90 days.

  • You receive your renewed two wheeler policy instantly: Once you enter the basic two wheeler details to renew your policy, compare policies from different insurer, and after opting the right policy, you will receive the policy within minutes in your inbox.

What If You Bought a Wrong Motor Insurance Policy?

There is no free look up period in motor insurance.

If you have purchased a wrong insurance policy – the vehicle model is not the same as you own or if you wanted a private vehicle insurance policy and by mistake you ended up owning the commercial vehicle insurance or vice-versa, then you need to cancel the policy.

If you cancel your motor insurance before the start of the risk date – policy start date, then you may get full refund. However, if you cancel after the start of the risk date – policy start date, the refund would be on pro rata basis.

How to Claim Under Motor Insurance Policy?

In the case of an unfortunate accident, you have to file a claim. Depending on the type of claim, procedure and documents will vary.

For claims to be accepted, your policy should be in-force and the insurance cover of the vehicle should be valid.

Following are the documents required depending on the type of Motor Insurance claims:

  1. Driving Licence
  2. Registration Certificate Book
  3. Police Report (F.I.R / Spot survey if T.P.)
  4. Claim Form with garage estimate
  5. Surveyors report
  6. Final Bill from repairers
  7. Receipt/ bill from the repairer
  8. Discharge voucher (full and final payment)

The procedure differs depending on the type of claim:

1. Claim Own Damage under Motor Insurance Policy:

  • Intimate the insurance company on their toll-free number.
  • Lodge a claim with a duly signed Claim Form.
  • Keep a copy of Driving License, RC book, Policy document ready.
  • Surveyor will be assigned for inspection.
  • FIR, if required (Kindly note down, contact details of people and vehicle number involved in accident).
  • Original Repair Estimate Bill.
  • In case of cashless service, only Invoice receipt.
  • In case of reimbursement provide estimate bill, original invoice and payment receipt.

2.Total Loss Claim under Motor Insurance Policy:

  • If the vehicle is beyond repairs, then you can claim for Total loss.
  • If the market value is more than the IDV, the insurance company will pay IDV.
  • The salvage of the damaged vehicle will be taken by the insurance company.
  • Insurer will collect the RC book, keys and other necessary documents.

3. Theft Claim under Motor Insurance Policy:

  • Intimate the insurance company and the Police about the theft.
  • Submit First Information Report (FIR) issued by Police.
  • Submit a "Non-Traceable" certificate issued by Police, if the vehicle could NOT be traced.
  • Once claim is approved, submit the 'Non-Traceable Certificate + R.C. Book +Taxation Certificate to the insurer.
  • The Insurer would take the keys R.C. Books etc.
  • The claim is settled.

4.Third Party Claim under Motor Insurance Policy:

  • Immediately intimate the insurance company on their toll-free number.
  • Lodge the claim with duly signed claim form.
  • Submit Police FIR copy.
  • Submit a copy of Driving License, Policy and vehicle's RC book.

The procedure for third party claims is as followed:

(a) On receipt of notice of claim, the matter is entrusted to an advocate.

(b) Full information related to the accident is obtained. And following documents are required:

  1. Driving License
  2. Police report
  3. Details of driver's prosecution, if any
  4. Death certificate, coroner's (Post Mortem report) report, if any (fatal claims).
  5. Medical Certificate (bodily injury claims)
  6. Details of age, income and number of dependents etc.

Can You Avail Tax Benefit Under Motor Insurance Plan?

In a way, yes, you can avail tax benefit under motor insurance.

But read further to know how:

If you use your vehicle for the purpose of business, then the premium you paid can be treated as an expense for which you can avail tax benefit.

Clause:

  • If the vehicle is used solely for personal purpose and not for business, the motor insurance premium paid would not be accepted to be treated as an expense, and you cannot avail tax benefit.
  • If the vehicle is partially used for business purpose and partially for personal use, then the income tax deduction would be based on the proportion in which it is used for the purpose of business.

Note: Please consult your chartered accountant for more information to check if you are eligible to avail income tax deduction.

Impact of GST on Motor Insurance Plan

Earlier, different taxes were levied on general insurance. With the implementation of GST, the taxation is simplified to an extent. Having said that, due to GST on motor insurance, the policyholder will now end up paying higher tax on the insurance plan.

Prior to the implementation of GST, it was 15% tax on the motor insurance, but after implementation, the policyholder will pay 18% tax on the policy purchase.

The increase in taxation due to the GST on motor insurance policies, has affected the amount of premium paid by policyholders.

But, one must keep in mind, this increase in rates shouldn't stop you from providing a protective shield to your vehicle. Primarily, because safety comes first.

Documents Required to Buy Motor Insurance in India

At the time of renewal, policy details are required.

The basic documents you may require is RC copy and driving license.

However, with the recent amendment passed by Supreme Court, having PUC certificate is mandatory to buy insurance in Delhi/NCR region. As of now, it is compulsory in Delhi/NCR, but it is expected to be mandated across the country. So, one may have to produce PUC certificate to buy an insurance policy.

From Where You Can Buy Motor Insurance Plan in India

You can buy vehicle insurance either online or offline. However, these days more and more people are buying insurance online. Online buying of motor insurance is instant, cheap, and hassle-free.

You have two options when it comes to buying motor policy online:

1) Visit any insurance company’s website. Enter your vehicle’s details. Enter other basic details, once done, you can proceed to pay the premium. After paying the premium, you will receive the soft copy of your insurance policy in your inbox.

2) Visit any online web aggregator. Enter the vehicle details. You can compare different motor insurance policies offered by various insurance companies. You can buy the most suitable insurance policy for your vehicle after comparing policies online.

Vehicle Insurance Companies in India

Bharti AXA Motor Insurance Bajaj Allianz Motor Insurance
HDFC Ergo Motor Insurance IFFCO Tokio Motor Insurance
Kotak Motor InsuranceNew India Assurance Motor Insurance
Oriental Motor InsuranceReliance Motor Insurance
United India Motor InsuranceUniversal Sompo Motor Insurance

Want HELP in Buying Motor Insurance Plan?

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Now, you can choose the insurance policy as per your requirements. You can decide which policy you must have. Comparing motor insurance policies gives you the benefit of buying the right type of policy.

Once you enter the basic details of your vehicle, the tool will fetch the motor insurance premium quotes from the top insurance companies, this way you can compare policies, premiums, add-on covers, and so on, before buying.

Things to keep in mind:

  • It is illegal to run any vehicle on the Indian roads without having the third party insurance.
  • Claims pertaining to the own damage of the vehicle will be paid by the insurance company subject to the surveyor's assessment.
  • The court will settle any third party claim, the procedure is already laid down by the government to settle these cases.
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