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Car Insurance
Car insurance or four wheeler insurance provides you with financial covers for the damage of your car from accidents, theft, and fires. It also protects you from expenses caused by natural disasters, animal attacks, and damage caused by people. Plus, it covers any legal costs if you harm someone else or their property. In India, it's required by law to have at least third-party car insurance to drive legally.
What is Car Insurance?
Car insurance is an agreement between you and your insurance company that protects you from financial losses due to unexpected events like accidents, theft, and natural disasters. In India, the government requires all car owners to have at least third-party car insurance. Having valid car insurance also helps you avoid heavy traffic fines.
There are three types of car insurance policies available in India
- TP
Third-Party Insurance
- OD
Standalone Own Damage
- CP
Comprehensive Insurance
Third-party insurance is mandatory and only covers damage or injury you cause to others. Comprehensive car insurance is recommended because it provides coverage for accidental damages to your car, losses, and third-party liabilities, offering broader protection.
Top 10 Car Insurance Plans
Importance of Buying Car Insurance Policy?
- 01
The Obligation Of Third-Party Car Insurance
In India, it’s mandatory by law to have third-party car insurance. This policy protects you if you accidentally cause damage to someone else’s property or injure someone while driving.
02
Gives Easy Access To Cashless Garages
Having car insurance means you can get your car repaired at network garages without paying upfront. The insurance company directly pays the bill to the garage; therefore, you won't need to spend a single rupee.
03
Protect Your Car Against Theft
If your car is stolen, your motor car insurance policy can help you recover the financial loss by compensating you for the value of your vehicle.
04
Compensation On Death
In case of death due to an accident, a policyholder may avail compensation against such loss to cope with the loss and bear the related expenses.
- 05
Provide Personal Accident Coverage
Most car insurance plans include personal accident coverage to provide financial support in the form of compensation against submitted medical expenses or for disability resulting from an accident.
06
Hospitalization Expenses Get Covered
If you’re injured in a car accident and need hospitalization, your car insurance can cover your medical expenses and help reduce the financial burden on you.
07
Saves You From Traffic Fines While Driving
Having a valid car insurance policy helps you avoid heavy traffic fines, as it’s mandatory to have at least third-party insurance to drive legally in India.
08
All the Possible Damages Are Covered
Comprehensive car insurance covers a wide range of damages, including those caused by accidents, natural disasters, theft, and vandalism, ensuring that you’re financially protected in various situations.
What Are The Different Types of Car Insurance Policies in Our Country?
The best car insurance company in India mainly offers 3 types of policies. Let’e read out more about these policies to get better understanding:
CP Comprehensive Car Insurance Policy
Comprehensive car insurance policy offers complete protection. A comprehensive car insurance policy protects your car against all the damages caused due to an accident. It also covers the expenses incurred on the damages to a third party, car theft, damages caused due to fire, burglary, or any natural and man-made disaster.
Likewise, the life casualties of the driver and/or passengers inside the vehicle in the event of an accident are also covered in this policy. It is always advisable to have complete coverage for your vehicle.
OD Stand-Alone Damage Car Insurance Policy
In this policy, you are covered for any accidental damages to your car. These damages could be due to natural disasters (such as earthquakes, floods, cyclones, and landslides) or due to man-made disasters such as theft, burglary, riot, or strike. If you want to purchase this policy then you must have an active third-party insurance policy for your vehicle first. In this way, this policy provides optimal protection for your car.
TP Third-Party Insurance Policy
These policies compensate you for all the monetary losses and damages to the third party, incurred in the occurrence of an accident. Expenses such as death due to an accident, partial or total disability, and loss caused to the property are also covered by this car insurance plan. If your car causes injuries to a third party or damages their surrounding property, then the insurance company takes care of the expenses and compensates you for the same.
In the absence of a third-party insurance policy, you will have to pay a heavy penalty or your driving license could be seized, if caught by the traffic police authorities.
Third Party Car Insurance vs Comprehensive Car Insurance
To help you pick the best car insurance policy in India, let's take a look at the basic features of the different types of car insurance policies:
| Features | Third Party Car Insurance | Comprehensive Car Insurance |
|---|---|---|
| Coverage | Covers damages to others' property and injuries to others | Covers damages to your car, third-party damages, and more |
| Legal requirement | Mandatory by law in India | Not mandatory, but recommended |
| Protection against theft | Not covered | Covered |
| Protection against natural disaster | Not covered | Covered |
| Personal accident coverage | Usually limited | Included |
| Damage to your own vehicle | Not covered | Covered |
| Premium cost | Lower premium cost | Higher premium cost |
| Cashless garage access | Not typically offered | Often included |
| Customization options | Limited | Extensive options available (e.g., add-ons, riders) |
| Financial compensation | Only for third-party liabilities | Comprehensive compensation for various types of damages |
Key Features of Car Insurance Policy in India
| Categories | Key Features |
|---|---|
| Third party damage | Death, injuries & property damages |
| No claim bonus | Up to 50% |
| Discounts | Anti-theft, NCB, Deductibles, AAI membership |
| Add-on covers | More than 10 add-ons such as Zero dep, NCB protect, Roadside assistance, etc. |
| Own damage cover | Available under standalone and comprehensive |
| Car insurance premium | Starting at Rs. 2094* |
| Personal accident cover | Up to Rs. 15 lakhs |
| Buying/Renewal process | Online |
| Cashless Garages/Repairs | Available |
How to Choose the Right Insurance Policy?
When choosing the right car insurance policy, there are several factors to consider. Here are some key points:
01Pick the Right Coverage
Third-party insurance is enough to avoid fines, but if you want full protection for your car, a comprehensive policy is better.
02Choose the Right IDV
Select an Insured Declared Value (IDV) that’s close to your car's market value. A lower IDV might lower your premium but could bring higher costs for you if you need to make a claim. You can use the car insurance IDV calculator to help you decide.
03Check the Insurer’s Claim Settlement Ratio (CSR)
Look at the insurer's CSR before buying. A higher CSR means that the company can settle your claims quickly, so choose an insurer with a good CSR.
04Consider the Claim Process
Choose an insurance company that offers a quick and easy claim process, with 24/7 support and fast claim settlements.
05Compare Plans Online
Compare different car insurance plans online to find the best one that fits your needs and budget.
06Customer Assistance
Make sure the insurance company offers 24/7 customer support. This is important for resolving any questions or claims whenever you need help.
Online vs Offline: How You Should Buy Car Insurance
| Factors | Online | Offline |
|---|---|---|
| Convenience | Can be done anytime, anywhere using a computer or smartphone | Requires visiting an insurance office or meeting an agent |
| Comparison | Easy to compare multiple policies and prices | Limited to what the agent offers |
| Time | Quick process, usually completed in minutes | Time-consuming, may require multiple visits or calls |
| Discounts | Often offers online-exclusive discounts and lower premiums | Fewer discounts, typically higher premiums |
| Documentation | Paperless process, all documents stored digitally | Requires handling and storing physical documents |
| Personal Interaction | No face-to-face interaction; support is via chat or call | Face-to-face interaction with an agent |
| Customer Support | 24/7 online support available via chat, email, or phone | Support depends on the agent's availability |
| Payment Options | Multiple online payment options (cards, UPI, etc.) | Payment often through cash, cheque, or limited online options |
| Policy Issuance | Instant policy issuance and download | May take time for the policy to be issued and delivered |
| Renewal Reminders | Automated reminders via email/SMS | Depends on the agent or insurer to notify |
Best Car Insurance Companies in India 2023 - 2024
| Car Insurers | Network Garages | Claim Settlement Ratio | |
|---|---|---|---|
| Bajaj Allianz Car Insurance | 4000 | 98.5% | View Plan |
| Chola MS Car Insurance | 4636 | 96% | View Plan |
| Digit Car Insurance | Repair Anywhere | 96% | View Plan |
| Future Generali Car Insurance | 3500 | 96.3% | View Plan |
| HDFC ERGO Car Insurance | 8200 | 99% | View Plan |
| ICICI Lombard Car Insurance | 5900 | 96.75% | View Plan |
| IFFCO Tokio Car Insurance | 4300 | 95.8% | View Plan |
3rd Party Car Insurance Price List
| Engine Capacity of Cars | Third-party Premium | |
|---|---|---|
| Less than 1,000cc | Rs. 2,094 | View Quote |
| More than 1,000cc and less than 1,500cc | Rs. 3,416 | View Quote |
| More than 1,500cc | Rs. 7,897 | View Quote |
Inclusions and Exclusions of Car Insurance Policies
Inclusions:
Third-party liabilities
If you cause an accident that injures someone else or damages their property, this coverage helps pay for their medical bills or repairs.
Accidents
If your car is damaged in an accident, this coverage helps with the repair costs.
Theft
This coverage reimburses you for the loss if your motor vehicle is stolen.
Natural calamities
This coverage protects your car from damage caused by events like floods, earthquakes, or storms.
Man-made acts
If your car is damaged due to riots, vandalism, or other human activities, this coverage helps with repair costs.
Fire
If your car is damaged or destroyed by fire, this coverage helps with the cost of repairs or replacement.
Animal attacks
This coverage helps pay for repairs if animals cause damage to your car.
In-transit damages
If your car is damaged while being transported, this coverage helps cover the repair costs.
Exclusions:
Car’s depreciation
Insurance doesn’t cover the natural decrease in your car’s value over time.
Invalid driving license
If you drive with an expired or invalid license and meet with an accident, your insurance won’t cover the damages.
Drunk driving
If you cause an accident while driving under the influence of alcohol, your insurance won’t cover the damages.
Outside geographical limits
If your car is damaged outside the area covered by your insurance policy, you won’t be reimbursed for repairs.
Mechanical failure
Insurance doesn’t cover the cost of fixing normal wear and tear or mechanical breakdowns in your car.
Illegal driving
If you’re driving illegally, such as speeding excessively or running red lights, and have an accident, your insurance won’t cover the damages.
Add-On Covers for Car Insurance
Zero depreciation
Zero depreciation car insurance gives you the full value of any parts replaced after an accident without deducting the depreciation value. You won’t have to pay more because your car parts have aged.
1No-claim bonus protection
This cover allows you to keep your no-claim bonus even if you make a claim during the policy period. So you can keep your discount on future premiums.
2Pay as you drive
Pay as you drive cover lets you pay insurance based on how much you drive. If you don’t drive much, you pay less.
3Consumables
This cover pays for items like engine oil, nuts, bolts, and other materials used during repairs after an accident. It covers the small parts that are not included in standard insurance.
4Roadside assistance
This cover helps if your car breaks down, runs out of fuel, or needs to be towed. So you can get help anytime, anywhere on the road.
5Key protection
This cover pays for the cost of replacing lost or stolen car keys. This is also best for reprogramming electronic keys.
6Personal belongings
This cover protects personal items inside your car like your phone or laptop if they are stolen or damaged. So you can recover the value of your belongings.
7Engine protection
Engine protection cover pays for engine repairs due to damage from water ingress or oil leaks. It is an extra protection for one of the most expensive parts of your car.
8Personal accident
This cover provides financial help if you or your passengers get injured in an accident. It pays for medical expenses or compensation in case of serious injury or death.
9Tyre protection
This cover pays for the cost of repairing or replacing damaged tyres. So you won’t have to pay extra if your tyres get damaged.
10Daily allowance
This cover gives you a daily cash allowance to use for transportation if your car is being repaired after an accident. So you can cover the cost of alternative transport while your car is in the workshop.
11
Car Insurance Terms You Need to Know
- 01
Premium
This is the amount you pay to keep your car insurance. It’s the cost of having insurance coverage.
- 02
Deductible
This is the amount of money you agree to pay out of pocket before your insurance covers the rest of a claim. Choosing a higher deductible can lower your premium.
- 03
Coverage
This refers to the protection your insurance policy provides, like paying for damages or injuries in an accident. Different types of coverage protect against different risks.
- 04
Liability Coverage
This covers costs if you cause an accident and are responsible for someone else's injuries or property damage. It protects you from paying these expenses out of pocket.
- 05
Collision Coverage
This pays for repairing or replacing your car if it's damaged in an accident, no matter who caused it. It helps cover the cost of fixing your car after a crash.
- 06
Comprehensive Coverage
This covers damage to your car from non-collision events like theft, fire, or natural disasters. It protects you from a wide range of risks.
- 07
Personal Injury Protection (PIP)
This covers medical expenses and lost wages for you and your passengers, no matter who caused the accident. It’s also known as "no-fault" coverage in some states.
- 08
Medical Payments Coverage
This helps pay for medical expenses for you and your passengers after an accident, regardless of who is at fault. It’s a simple way to cover medical costs quickly.
- 09
Endorsements/Riders
These are additional options you can add to your policy for extra protection. They customize your insurance to meet your specific needs.
- 10
Claim
This is the request you make to your insurance company for payment after an accident or damage. When you file a claim, the insurance company evaluates the situation and decides how much to pay.
- 11
Adjuster
This is the person who investigates your insurance claim, inspects the damage, and determines how much the insurance company should pay. They help settle claims fairly.
- 12
Total Loss
This occurs when the cost to repair your car is more than its value, so the insurance company considers it a "total loss." In this case, they pay you the car’s value instead of fixing it.
- 13
Actual Cash Value (ACV)
This is the amount your car is worth at the time of a loss, taking into account depreciation. It’s what your insurance would pay if your car is damaged or totaled.
Factors That Affect Car Insurance premium
Year of Manufacture
The premium depends on when the car was made. Newer cars might have higher premiums because their spare parts are harder to find.
Fuel Type
It costs less to repair petrol cars compared to diesel or CNG cars, so petrol cars usually have lower premiums and are cheaper to insure.
Location
Cars in urban areas with more traffic tend to have higher premiums because the risk of accidents is greater compared to rural areas.
Insured Declared Value (IDV)
The IDV is the maximum amount you can claim for your car. A higher market value and IDV mean a higher premium.
Make and Model
Luxury or high-end car models have higher premiums because their parts and repairs cost more, while lower-end models have lower premiums.
Add-Ons
Adding extra coverage to your insurance increases your premium. The more add-ons you choose, the higher your premium will be.
How to Calculate Car Insurance Premium Online?
The IRDAI sets the new car insurance rates for third-party coverage based on the car’s engine size. For calculating the own damage (OD) premium for a new car, you have two options
Using Car Insurance Price Calculator
The easiest method to calculate car insurance premiums for a new car is to use a car insurance policy calculator. The calculator will calculate the estimated new car insurance price along with the IDV of your four-wheeler.
Using Car Insurance Premium Calculation Formula
You can also calculate the OD premium for your car with this formula:OD Premium = Car's IDV * Premium Rate (decided by the insurer) + Add-Ons - Discount & benefits (no claim bonus, theft discount, etc)To calculate the IDV of your car:IDV = (Current market value - the depreciation value) + (Cost of vehicle accessories - the depreciation value of these parts)
What Are The Ways To Save Money On Your Car Insurance Policy Premium?
The estimated value of a car depreciates with time. Therefore, it is always advisable to know the exact value of your car. You have to pay a lower amount of premium if the IDV of your car is lower.
If you are a responsible driver and have not filed a claim for the past few years then the No Claim Bonus is a type of reward for your responsibility. In such a case, you can earn a discount of up to 50% on your premium year after year and can save money on your car insurance price.
Acquiring the Automobile Association of India membership is an important step in saving money on your premium. If you are a member of AAI, you can catch a concession on a personal damage premium.
Voluntary Deductible is that amount which you agree to pay from your pocket. The bigger the amount of these deductibles will be, the lesser the amount of premium you will have to pay to the company.
How to Buy Car Insurance Policy Online?
To purchase car insurance online from Square Insurance, you need to follow some easy steps for a hassle-free process.
- 1
Start on the homepage and click on "Car Insurance."
- 2
Type your registered car number or click "Got a New Car" if it’s a new purchase.
- 3
Choose your car’s details like make, model, variant, fuel type, and registration date.
- 4
Complete the registration form and click next.
- 5
Review the available car insurance plans and pick one that fits your budget.
- 6
Add any extra coverage options in the "Add-on Cover" section if you're choosing a comprehensive plan.
- 7
Finish by paying online using a debit/credit card, UPI, or net banking.
- 8
Check your email for the policy documents from the insurer.
Which Documents Are Required To File A Claim Through Your Car Insurance Policy?
- 1
Copy of Police FIR (filed after the unfortunate event)
- 2
Claim form completely filled and duly signed by the policyholder
- 3
Fitness certificate for commercial vehicles
- 4
Driving license (one photocopy of the original document)
- 5
Insurance documents with the endorsement (copy of insurance policy)
- 6
Car registration certificate (RC of your four-wheeler)
How to Renew Car Insurance Online?
Renewing your car insurance with Square Insurance online is fast and simple. Here’s what you need to do:
- 1
Go to the car insurance renewal section on their website.
- 2
Fill in the required details like your policy number, mobile number, and date of birth, then submit them.
- 3
Choose the car insurance plan that suits your needs.
- 4
Add or remove any extra coverage options (riders or add-ons) you want.
- 5
The amount you need to pay as a premium will be displayed.
- 6
Make the payment online using a credit card, debit card, or net banking.
- 7
After payment, your car insurance policy will be renewed.
You'll receive the renewed policy document in your registered email. You can also download and print it whenever you need.
How to File a Car Insurance Claim?
Right after an accident, the policyholder should report to the insurance carrier in order to open up a case. Take clear photos of the damage to use as proof.
The insurance company will send a surveyor. Have all the necessary documents ready to be verified by them against your claim.
After the inspection, take your car to a network garage to get it repaired.
If your policy allows for cashless repairs, the insurer will pay the garage directly. If it's a reimbursement claim, you’ll pay first and then get reimbursed by the insurance company.
Documents Required for Filing a Car Insurance Claim
- A completed and signed claim form
- Your KYC documents
- A copy of your car insurance policy
- A copy of the vehicle's Registration Certificate (RC)
- A copy of the driver's license of the person driving during the accident
- A copy of the police FIR for theft claims
- Original repair bills and payment receipts
- Estimated repair bills
How to download your car insurance policy copy online?
In case you lose your car insurance policy documents, you can also download a policy copy from Square Insurance brokers by following these simple steps:
- Step 1
Go to squareinsurance.in and click on the "Sign in" tab.
- Step 2
Sign in using an OTP or by entering your password.
- Step 3
Once signed in, you'll be taken to your account dashboard.
- Step 4
In the "Policies" section, you can download your car insurance policy.
Reasons Why you Should Buy a Car Insurance Policy from Square Insurance Brokers?
The Process Is Transparent
The process of generating policy from our side is transparent. Our agents do not hide any information or facts from you. We also provide complete and proper documentation as we believe in sharing all the important information with our customers.
Advice From An Expert
Our experts suggest the best quotes that suit the best to your needs. They discuss all the necessities in detail with you and bring out expert opinions to deliver the best policies and plans to you.
Quick Claim Settlements
We take the least time to settle your claims. The process of damage estimation and claim filing is done by our agents with utmost dedication. This is the main reason our clients always feel satisfied and happy with our prompt service.
Simple And Secure Payments
Our payment system is not only quick but also there is no fear of losing receipts and accounts-related information. We keep all the financial information of our clients, account track record, history of renewals, and payment gateways totally safe.
Prompt Customer Service
We have the fastest and the most reliable customer service with a maximum customer satisfaction ratio. We always train our employees to give you satisfactory services.
Less Paperwork And Safe Documentation
With the minimum of paperwork and quick process of getting insured, our company provides optimum car insurance policies. Even the process of documentation is safe and simple.
FAQs
Car insurance or four wheeler car insurance is a contract between you and your insurance provider that covers you against financial losses from unforeseen events such as accidents, theft, and natural disasters.
Vehicle insurance is made to protect you from huge financial losses if your car gets damaged or stolen, or if it causes harm to others or their property. It's like a safety net that protects your car and gives you peace of mind.
Comprehensive insurance is generally considered the best because it covers not only damage to other vehicles and property but also theft and damage to your own car from accidents, natural disasters, and sometimes even vandalism.
Yes, having at least basic third-party insurance is mandatory by law in India. This covers damage your car might cause to other people or property but doesn't cover damage to your own car.
To pay for car insurance online, you can use digital payment options like credit cards, debit cards, or online bank transfers to complete the transaction. It's a quick and secure way to handle the payment without going to an office.