With so many car insurance plans available, have you got your vehicle insured? If not, then it’s recommended that you do because as per law, it is mandatory to get your vehicle insured if you want to drive it on the streets. Failing to do so is a punishable offence in the form of a fine and/or imprisonment for up to three months. So, now that you’re aware of the repercussions let’s understand some of the car insurance plans out there.
Car insurance provides financial protection to you and your car against any damage or loss that may happen due to any reason like accidents, fire, theft etc. Technically speaking, it is an agreement where the car owner will pay certain premiums to the insurer in return for financial protection to cover damages to the insured or the car.
Considering the different types of requirements of each car owner, there are different types of car insurance in India for you to choose from. Here’s a quick look at the different types of car insurance plans available in India and what it includes:
Let's get into the details:
As the name suggests, third-party liability cover provides cover for the damages and losses incurred to a third-party person or property. It protects you against the costs incurred to the damages of someone else’s car caused by your car. So, if your motto is to cover legal obligations only or you have an old model that you rarely drive, you can consider this car insurance plan. The cover is limited to ₹7.5 lakhs, but in the case of death, it is unlimited.
A comprehensive car insurance policy is designed for people who want all-around protection and coverage for their four-wheeler. It provides coverage for its own damage as well as third-party cover. Compared with third-party insurance, it offers more coverage and benefits. Accidents, theft, fire, natural disaster, mishaps, etc., are all covered under this car insurance policy.
Just like the third-party liability cover protects only a third-party person or property, a Standalone Own Damage Car Insurance Plan only covers own damage, which can be accidents and other mishaps. This policy is an option for car owners who already have a third-party cover and want their own damage cover as well.
The table below mentions some of the best car insurance plans. Have a look to make a well-informed decision-
Out of the various car insurance plans, choosing the right one can be confusing. There are 3-month car insurance plans out there as well and for a longer tenure. In order to get your hands on the best affordable car insurance plan, ask yourself these questions-
You first need to pen down your requirements and expectations for car insurance. For instance, if you are a frequent driver, you may want a 360-degree car cover. On the other hand, if you have purchased a car for your old parents, they may only require a third-party cover if you are not driving frequently and so on.
Premium plays a centric role in deciding if you want to purchase a specific car insurance plan. Apart from this, deductibles also play a major role. The higher the deductibles, the lower will be the premium and vice-versa. So, choose wisely.
It’s always better that you extend the coverage of your car insurance plan. In such a case, add-on covers play a major role. Some popular ones are zero depreciation cover, roadside assistance, key loss cover, tyre damage cover, and so on.
Checking on the motor incurred claim ratio is essential as it gives you a broader idea of the particular insurance company's services and settlements. So, do not overlook this section even if you get a wide range of coverage. The better the ratio, the more credible the company.
All the covers you are getting under your chosen car insurance plan, are these enough? If not, do not miss out on surfing for the best one available in the market.
Now that you’re aware of some good car insurance plans, it is important that you consider the ones that are best suited as per your vehicle. Having a comprehensive plan is the most suitable since you get an all-round cover along with several other benefits so that you don’t have to worry about what damages you can and cannot claim.
Going for the cheapest insurance may not always be helpful since it may involve lower coverage of your car parts. Some ways of getting a lower your premium can be
Car insurance depends on a number of factors. Different car insurance companies offer different deals on car insurance. Market research will help you get the lowest car insurance.
Going for the cheapest car insurance plan may not always be a good idea. Why? This is because the aim of car insurance must be a maximum benefit and cover under a minimum premium. If you do not get ample cover, you may end up paying from your pocket.
In the Indian context, the Insurance Regulatory and Development Authority of India (IRDAI) publishes annual reports on the claim settlement ratio of insurance companies. The claim settlement ratio is a measure of the number of claims settled by an insurance company against the total number of claims received.
According to the IRDAI's latest report (2020-21), the following are the top five insurance companies in terms of claim settlement ratio for the financial year 2020-21:
Max Life Insurance - 99.22%
HDFC Life Insurance - 99.04%
ICICI Prudential Life Insurance - 98.58%
SBI Life Insurance - 98.15%
Tata AIA Life Insurance - 98.01%
The choice between third-party and comprehensive car insurance depends on your individual needs and budget.
Third-party car insurance is a basic policy that covers damages to the third party involved in an accident, including injuries or death, and damages to their property. This policy does not cover damages to your own car or injuries to yourself in an accident. Third-party insurance is mandatory in India as per the Motor Vehicles Act, 1988.
Car insurance is not inherently "the best" as it depends on the individual's needs and circumstances. Car insurance is important in India as it provides financial protection, mandatory as per the law, and offers optional coverage with easy purchase and renewal options.
