Car Insurance

What is Car Insurance

Car insurance is a type of insurance policy that efficiently takes care of expenses arising from unfortunate events, such as an accident, theft, and any third-party liability. Car insurance is the best way you can protect yourself and your car from financial emergencies, including any legal liability, resulting from physical damage, traffic collision, bodily injury caused to you, your car, or a third party. Various car-insurance-specific terms & conditions are subject to vary with legal regulations in different regions of the country.

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Car Insurance or motor insurance covers for losses that you might incur if your car gets damaged or stolen. The premium amount of your car insurance is decided on the basis of Insured Declared Value or IDV of the vehicle. If you increase the IDV, the premium rises and if you lower it, the premium reduces. It is important for any policyholder to compare various auto insurance options before going for a car insurance renewal or buying a new policy.

Car insurance plan offers following benefits:

  • Coverage against loss or damage to the insured vehicle.
  • Coverage against loss or damage to your vehicle caused by accident, theft, fire, explosion, self ignition, lightning, riots, strikes or act of terrorism, natural calamities.
  • Coverage against financial liability caused by injury/death of a third party or damage to the property.
  • Personal accident cover

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Best Car Insurance Companies with Claim Settlement Ratio 2018

  • Insurance Company Incurred                                      Claim Ratio              Grievances Settled
  • Bharti AXA General Insurance                                     89.09%                     99.81
  • Future Generali India Insurance                                  81.77%                     99.86
  • ICICI Lombard General insurance                              78.91%                      97.61
  • Liberty General Insurance                                           77.29%                      99.06
  • National Insurance                                                       89.91%                      96.11
  • Bajaj Allianz General Insurance                                 69.19%                       99.28

There are primarily 3 types of Car Insurance -

Third Party Liability Coverage

Third Party car insurance provides cover against any legal liability to a third party caused when you are at-fault driver. It covers damage/injury caused by you to another person/property. A Third Party Liability cover is legally mandatory in India under the Motor Vehicles Act.

Collision Coverage

Collision coverage protects the insured financially against damage of their own car. It pays the insured for damage caused by collision which is usually an accident. Damage or loss due to theft or vandalism is not included in collision coverage.

Comprehensive Coverage

A comprehensive coverage is extensive and includes damage of car, theft of vehicle, third party legal liability and personal accident cover. The policy coverage can be further extended by opting for addons like accessories cover, engine protector, zero depreciation cover, medical expenses, etc. This type of coverage is the most popular as it offers end-to-end coverage and thus less stress for the policyholder.

 

Smart Buying tips for your Car Insurance

Be an Add-on Smart Cookie

Get complete information about the add-ons available to be integrated into your car insurance policy for additional coverage.

Renew On Time, Every Time

Set reminders for your car insurance renewal dates so you never miss your policy's renewal date.

Avoid False Declarations

False declarations will come back to haunt you. Your car insurance policy will lapse immediately if any incorrect information is found at any stage of your coverage period.

Discount for Security Features

Some cars come with enhanced built-in security features such as anti-theft alarms, immobilizers and other systems that give potential thieves nightmares.  With a low probability of theft, such cars can be insured for less premium.

Your premium for a Car insurance is determined by

Registration City

The city where a vehicle is registered determines premiums. Cars in metropolitan cities have to pay higher premiums as the incidence of vehicle thefts and accidents is higher.

Make & Model

Vehicle make and model and potential risk factors associated with it is a factor. For instance, some makes and models fare better in collisions than others so injuries to occupants and damage to the car would be less severe.

No Claim Bonus Percentage

The insurance premium amount will always be less if you haven't made any claims before. The no-claim bonus percentage plays a major role in determining your premium amount.

Type of Cover Taken

Additional cushions you may consider such as cover for CNG/LPG kits, key replacement costs, road-side assistance etc. will increase your premium amount.

Expert Tips For Cutting Your Car Insurance Costs

You Snooze, You Lose

Always renew your motor insurance before the due date to avoid the inconveniences such as vehicle inspection as well a potential increase in premium cost.

Don't Sweat the Small Stuff

Making small claims like dents and scratches will push up the premium amount when you renew it the following year and you will lose the no-claim bonus in the corresponding year.

The Net's Your Best Bet

Buying car insurance online will save you a pretty penny in processing and distribution costs and could give you more discounts than a direct purchase.

What is not covered in Car Insurance?

Following features are usually not covered in car insurance:

  • Loss or damage if a policy is not in force.
  • Gradual wear and tear of car and its parts.
  • Loss or damage to vehicle when driven by person without a valid driving license.
  • Loss or damage to vehicle as a result of intoxication due to drugs, alcohol etc.
  • Loss or damage to engine as a result of oil leakage.
  • Loss or damage to vehicle as a result of abuse of car manufacturer's guidelines.