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  • What is Car Insurance

    Purchasing car insurance is a little like buying a life jacket before canoeing through the rapids – it’s a small price to pay for security when navigating dangerous waters. And Indian roads are nothing if not dangerous.

    Driving on the road has its own risks even if you follow all rules and regulations and undertake precautions as a driver. To ensure the safety for everyone concerned, the Indian Road Safety Act and Indian Motor Vehicles Act makes it mandatory for all vehicle owners to have insurance before they drive a vehicle on the road.

    Surprisingly, after spending months of research for their car purchase, many car buyers choose car insurance randomly without any research. Since car insurance offers a protective cover against damages and theft, this is like plunging into the rapids with a flimsy life vest.

    With many general insurers offering car insurance with various add-ons and features both online and off-line, choosing the right car insurance can become a slippery slope. Car insurance must be purchased after considering all parameters, not just the premium amount.

    Types of car insurance

    Purchasing car insurance is not about buying off the shelf whichever plan comes with a lower premium. Motor insurance is broadly classified into two distinct categories. A policy must be taken after understanding the features of both categories to ensure an effective cover.

    Third party insurance: Third party insurance is an accident insurance cover that offers protection to any third party that may get affected in the event of a motor accident. Essentially, third party insurance covers any bodily harm or injury caused to a third party, including damage to a person or property.

    Opting for third party insurance is mandatory as per the Indian Road Safety Act and Indian Motor Vehicles Act. Third party policies are part of a comprehensive car insurance policy and are also offered as standalone policies. As it is limited to protection for third parties, a third party insurance plan does not entertain claims for damages caused to your own vehicle or yourself in the event of a road accident.

    The third party premium rate is fixed for vehicles with same engine capacity, and is different for private cars. There are options for adding coverage for all passengers and increasing the sum insured at additional premium payment.

    Third party insurance covers:
    • Any legal liability for any damages caused to a third party including death and bodily injury.
    • Liabilities for damages caused to a third party's property.
    • Accidental death or permanent total disability caused for the owner / driver out of an accident

    Third party insurance excludes:
    • Any damage for car is not covered under a third party policy.

    Comprehensive car insurance: Comprehensive car insurance, as the name suggests, is a much broader insurance cover that offers protection for self and car along with third party coverage. Additionally, a comprehensive car insurance plan makes you eligible for protection of the vehicle against accidental fires, thefts, or natural calamities. Opting for a comprehensive cover is optional, but the extensive coverage it provides makes it an essential aspect of having insurance cover for your vehicle.

    Though premium rates are standard across India for vehicles of various segments, there will be slight variations in the premium rates across insurers. The higher the vehicle value, higher premium will be. A comprehensive car insurance policy can be customized with several add-ons like cover for accessories, engine, medical expenses, etc

    Comprehensive car insurance covers:

    • Loss or theft of vehicle, any legal liability to third parties, and personal accident cover are all available under comprehensive insurance plan.
    • Deliberate accidental loss or damages due to driving the car under the influence of alcohol or drugs are not covered.
    • Loss of vehicle or damage caused by natural calamities like flood or fire

    Comprehensive car insurance excludes:

    • The maximum claim is limited to the Insured Declared Value (IDV) of your car.
    • Any losses arising out of normal wear and tear, are not covered.
    • Damages caused due to drunken driving or due to driving by a person without valid license is excluded
    • Damage caused by war, mutiny or nuclear risk.
    • Damage to certain parts like tyres, bumper, electrical or mechanical breakdowns will get full coverage only with add ons.

    Having the appropriate insurance plan for your car can make all the difference between safely reaching the shore and getting washed away in the rapids without a life vest.

    What is the need for Car Insurance?

    Driving is a luxury that a vast majority of people do not have. So if you are purchasing a car and becoming a part of the driving population, it is essential to have a car insurance in place as both your social and your financial responsibility. Depending on your car cost, its age, your surrounding areas, and associated risk factors, you can choose between mandatory third party insurance and more detailed comprehensive car insurance. Either way, the need for car insurance is very real, especially with rising car repair costs and increasing cases of road accidents.

    Essential reasons why car insurance is a must-have

    Many car owners often wrongly consider car insurance as an unnecessary expense that they must undertake before they are able to drive their vehicle. Lack of well-trained drivers and non-compliance of road safety rules in most cities and towns translate into increased chances of a sudden accident.

    Slight misjudgments or oversights by even experienced drivers can result in serious accidents on the road. So do not disregard insurance as an unwanted expense.

    Here are five essential reasons why opting for a car insurance is just as important as purchasing the car itself.

    Peace of mind: Getting involved in an accident can mean shelling out large sums of money for any damages you may cause to yourself, your car, any third party, or third party property etc. With car insurance in place, you can rest assured that your financial liabilities (or at least most of them) will be taken care of in case of any untoward incidents. By opting for car insurance, you are getting rid of mental worries and stress that may affect your driving when on the road.

    Cost effective legal compliance: You do not always have to spend high amounts of money for car insurance. If you are on a small budget, opting for third party insurance can at least ensure all your legal liabilities for damages caused to a third party or third party property are duly covered.

    Includes accident cover: A comprehensive car insurance ensures you get not only protection for car damages and third party liabilities, but also a personal accident cover, in the event of an accident. With rising number of road accident cases, having such an accident cover works as a genuine protection tool especially if you are the sole breadwinner in the family.

    Protects against non-collision damages: Car insurance does not mean protection against damages caused by accidents alone. The cost of car repair and non-collision damages can burn a hole in your pocket. With a comprehensive car insurance bundled with selected insurance add-ons, you can optimize your car protection, ensuring minimal costs for any non-collision damages.

    Plenty of insurance options to choose from: Presently, there are multiple insurance companies offering motor insurance, allowing you to choose the best “value for money” insurance policy. You can make use of insurance aggregators to compare car insurance plans and inclusions to finalize the best policy for your need. With online car insurance, you also have the advantage of lower premium costs as commissions to insurance agents or middlemen are eliminated.

    So, when you buy your car, or when your car insurance expires, make sure to purchase or renew your car insurance policy so that you can drive safe and be protected.

    Key benefits and features of Car insurance

    Although availing third party insurance is mandatory under the Indian Motor Vehicles Act, a comprehensive cover offers multiple benefits to you as a vehicle owner. When you opt for comprehensive car insurance, you not only safeguard yourself against any legal obligations arising out of an accident but also offer protection to your car on account of any theft or damages while being involved in any accident. The level of protection offered depends on the underlying car insurance cover you select, including any additional car insurance add-on benefits you may have opted for.

    Some of the common car insurance features include:

    • Legal cover for any damages to any third party or vehicle while driving.
    • Liabilities cover for any third party deaths or injuries on account of any accident or mishap.
    • Personal accident cover for the driver of the insured vehicle, provided the driver is of a legal age with a valid license and not under the influence of any drugs or alcohol.
    • Protection from any losses or damages to your insured vehicle in the event of any accident or natural disasters like flood
    • Coverage against loss of theft of the insured vehicle

    Other benefits associated with car insurance:

    As the vehicle owner, you have the option of availing a more optimal protection for your car by seeking insurance as per various add-ons offered by car insurers. From no-claim-bonus benefits and zero depreciation cover, to engine and electronic circuit cover and quick road assistance, there are multiple add-ons for you to choose from. You can choose the most suitable add-on as per your risk factors to ensure your car insurance purchase is optimized. Hence by opting for a comprehensive car insurance policy along with most suited add-ons can you can ensure your car is protected against any eventuality.

    With a rise in the number of car insurers, it is always a good idea to compare car insurance plans and premiums from multiple insurers before choosing the most suited one. The rising maintenance and repair costs of automobiles today means that stopping at bare minimum insurance can come back to bite you in the nose in the event of any accidental repairs or a possible theft.

    Driving your car safely by following road safety rules and maintaining optimum car insurance coverage are two essentials that can ensure peace of mind and adequate safety while commuting in your much loved vehicle.

    Why is it necessary to compare car Insurance online

    With an increase in the number of car buyers in India, there has also been a rise in the number of car insurance service providers. Gone are the days when opting for car insurance meant you went by whatever option your insurance agent recommended.

    Today, there are multiple insurers, each offering various insurance cover benefits and add-ons, allowing you to choose the most suitable and budget-friendly one. What’s more, you can also compare the ease or difficulty other insurance policy holders experienced during their claim settlement process to shortlist the best insurer for your needs.

    The advantages of comparing car insurance plans online

    With increasing use of technology, users are constantly comparing technical specifications, prices, ratings, and YouTube review videos when it comes to purchase of items like smartphones or home furniture. Interestingly, when it comes to car insurance, many policy buyers still take the word of car dealers or agents.

    Comparing insurance quotes online can give an insight into the various protections being offered by each insurer along with an active price comparison. If you are too busy to check out car insurance quotes for each insurer, opting for insurance aggregators gives a single interface where you can seek multiple quotes from various car insurers.

    Comparisons of cost benefits: Since online car insurance automatically means you are bypassing insurance agents, the rates on offer are quite lucrative compared to offline insurance plans. This cost advantage in itself is a prime motivation to compare insurance quotes online before opting for the right plan.

    Advantage of user reviews: When you compare car insurance online, you are not only comparing rates but also getting an insight into user reviews of fellow insurance policyholders. This feedback can help you choose the most customer friendly insurer while addressing your price sensitivity and protection needs for your vehicle.

    Detailed analysis for a smart choice: An online car insurance comparison can make it easy for you to choose from among hundreds of car insurance plans available in the market. Ideally, a good motor insurance policy is one that offers a healthy balance between protection on offer and the premium price including insurance add-ons. With online comparison between multiple insurance policy offerings, you increase your chances of opting for the optimum motor insurance plan that is cost effective and offers adequate protection for your car.

    With online insurance marketplaces, comparing car insurance quotes has become as easy as ordering at a drive-through, without having to check with each insurer individually. As a result, online insurance comparison can help you pick the right plan at the right premium cost.

    What are the best online Car Insurance plans?

    Buying car insurance online not only offers ease and convenience but can also mean exclusive offerings. Many insurers today have exclusive car insurance plans for their online customers, providing one more reason for buying car insurance online.

    If you are planning to buy car insurance, buying online can open up a world of benefits. An insurance aggregator can be your go-to tool to make a proactive comparison between various online car insurance plans and choose the most suitable one.

    Here are some of the most popular and widely acclaimed online car insurance plans offered by various popular insurers.

    1: Bajaj Allianz Car Insurance: Bajaj Allianz Car Insurance offers third party covers up to Rs. 7.5 Lakhs with 400+ cashless network garages. The insurer has an incurred claim ratio of 72.07% (for the year 2015-2016) and offers basic cover with best value, standard, and flexible Plans. Bajaj Allianz has also been one of the first to introduce mobile app to minimize time for claim settlement. Website: https://general.bajajallianz.com/

    2: Bharti Axa Car Insurance: Bharti Axa Car Insurance offers third party property damage with a maximum cover of Rs. 7.5 Lakhs for private cars. Capital sum insured limited to maximum of Rs. 1 Lakh per person is offered. The insurer offers cashless claim service over authorized network of 2500+ garages across India. Bharti Axa Car Insurance has an incurred claim ratio of 91.49% for the year 2015-16. Website: https://www.reliancegeneral.co.in/

    3: Reliance Car Insurance: Reliance Car Insurance covers the policyholder against any accident while driving. The policy offers an additional third party cover of up to Rs. 10 Lakhs and 100% of capital sum insured of 5 Lakhs. Cashless claim service is available at over 3800+ authorized network of garages across India. Website: https://www.reliancegeneral.co.in/

    4: Royal Sundaram Car Insurance: Royal Sundaram Car Insurance is another popular online car insurance plan offering legal protection for death or injury claims from third parties. You can opt for voluntary deductible of Rs. 15,000 and get 35% discount on Own Damage Premium subject to a maximum of Rs. 2,500. Cashless claim service can be availed from over 3300+ authorized network of garages across India. The insurer has an incurred claim ratio of 82.78% for the year 2015-16. Website: https://www.royalsundaram.in/

    5: National Car insurance: If looking for car insurance plans from government-backed general insurance companies, a popular car insurance plan is the one offered by National Car insurance. The insurance plan comes with increased protection to the occupants against legal liability from property damage of third party up to a limit of Rs 7.5 Lakhs. The policy also offers direct cashless claim settlement in network garages across India. The policy covers Own Damage to the Insured vehicle caused by accident, fire, self ignition, and lightning, but excludes any damage to tyres. Website: https://nationalinsuranceindia.nic.co.in/

    6: Tata AIG Car Insurance: Tata AIG Car Insurance Policy offers a third party cover of up to Rs. 7.5 Lakhs with over 2,000 cashless network garages pan India. The insurer has an incurred claim ratio of 83.74% for the year 2015-16, making it a popular online car insurance plan. Website: http://www.tataaigmotorinsurance.in/

    7: Universal Sompo car insurance: Universal Sompo car insurance is one of the recent entrants on the car insurance scene but is gaining traction in the online car insurance market. As a joint venture between three banks, an FMCG company, and Japan-based Sompo Japan Insurance Inc, Universal Sompo car insurance offers coverage for own damage as well as third party damages. The policy covers loss or damage to the vehicle insured arising out of accidental external factors, landslides, or rockslides, making it popular with car owners and drivers in high altitude or high risk areas. Website: http://www.universalsompo.com/

    8: Future Generali Car Insurance: Future Generali car insurance has over 1000+ network of cashless garages across India making it easy to seek cashless claims. Future Generali car insurance policy offers third party coverage of up to Rs 7.5 Lakhs along with a personal accident cover of Rs. 50 Lakhs. Website: https://general.futuregenerali.in/

    9: HDFC ERGO Car Insurance: HDFC ERGO car insurance plan offers third party coverage of up to Rs. 7.5 Lakhs. HDFC ERGO has a network garage of 3400+ garages across India. Along with the basic cover offering protection for own damages and third party damages, HDFC ERGO car insurance also offers a depreciation cover, road side assistance, emergency assistance add-ons amid others. Website: https://www.hdfcergo.com/

    10: IFFCO Tokio Car Insurance: IFFCO Tokio motor insurance policy offers a third party protective cover of up to Rs. 7.5 Lakhs along with a personal accident cover of up to Rs. 2 Lakhs for individual owner-cum-driver. With a cashless network garage number exceeding 2700 pan India and a incurred claim ratio of 76.09% for 2015-16, IFFCO Tokio motor insurance is one of the popular online car insurance plans. Website: https://www.iffcotokio.co.in/

    While you can either buy car insurance online or through the offline mode, make sure, you do buy it as the law mandates it.

  • Q: Is taking car insurance compulsory?

    Q: Is my car covered for theft under third party insurance?

    Q: Is it advisable to seek car insurance from the dealer?

    Q: What are the documents required to seek car insurance?

    Q: What is third party insurance?

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