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Different Types of Car Insurance Policies Available in India
When you take a new car, you protect it with utmost force in the world. You do everything to keep it safe and in the best condition. And to aid you in this, your car insurance takes a step forward.
Your car insurance protects you and your car from unnecessary hassle during adversary conditions and ensures that you are car gets the best treatment always.
What is a Car Insurance?
Car insurance is a type of motor insurance that covers all types of cars against loss or damage due to accidents, natural calamities, fire, theft, etc. There are 3 types of car insurance to provide different types of coverages as per your needs, however, at least a third-party car insurance is mandatory by law in India.
Comprehensive and own damage plans also allow you to buy add-ons to further enhance protection for your car. So, getting car insurance is the best way to protect yourself from financial stress in such situations.
Why Car Insurance is Important?
Here’ why you should get a car insurance policy:
- Legal Compliance: Having at least a third-party car insurance is mandatory by law in India.
- Financial Protection: It covers expenses like repairs, replacements, and medical bills in case your vehicle is damaged in an accident, stolen, or affected by natural disasters.
- Third-Party Liability Coverage: It protects you from the financial burden of compensating third parties for damages or injuries caused by your vehicle.
- Additional Benefits: With comprehensive and own damage car insurance coverages, you get the option to choose from various add-ons for enhanced protection.
- Peace of Mind: Having car insurance keeps you financially protected in case of unforeseen events, thus allowing you to drive with peace of mind.
Types of Car Insurance Plans in India
| Third-Party | Comprehensive | Own Damage |
Damages/Losses to own car due to an accident |
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Damages/Losses to own car in case of fire |
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Damages/Losses to own car in case of a natural calamity |
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Damages to Third-Party Vehicle |
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Damages to Third-Party Property |
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Personal Accident Cover |
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Injuries/Death of a Third-Party Person |
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Theft of your car |
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Customize your IDV |
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Extra protection with customized add-ons |
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| Get Quote | Get Quote | Get Quote |
Know more about the difference between comprehensive and third party insurance
What’s not Covered?
It is equally important to know what’s not covered in your car insurance policy, so that there are no surprises when you make a claim. Here are some such situations:
In the case of a Third-Party or Liability Only Car Policy, damages to own vehicle won’t be covered.
You were driving drunk or without a valid driving licence.
You hold a learner’s licence and were driving without a valid driving licence-holder in the front passenger seat.
Any damage which is not a direct result of the accident (e.g. after an accident, if the damaged car is driven incorrectly and the engine gets damaged, it will not be covered)
Any contributory negligence (e.g., damage due to driving a car in a flood, which is not recommended as per the manufacturer’s driving manual, will not be covered)
Some situations are covered in add-ons. If you haven’t bought those add-ons, the corresponding situations will not be covered.
Types of Car Insurance Coverages
1. Collision Coverage
This is a type of Own Damage plan, but it covers your vehicle only in case of an accident, which includes repair expenses to your vehicle. Unlike a comprehensive cover, this only covers the vehicle in case of a collision and not in any other circumstance.
2. Personal Injury Coverage
This cover protects the owner-driver and the passengers in case of an accident. The medical bills and hospitalization charges are all covered by the insurance, not considering whose fault it was.
3. Uninsured Motorist Protection
This is a type of insurance that comes in handy if you are hit by another vehicle and the at-fault driver doesn’t have car insurance to cover your repair damages. Typically, any repair or medical bills should be covered by the at-fault driver’s auto insurance.
However, if the at-fault driver doesn’t have it then you will have to pay for it out of your own pocket. An uninsured motorist protection policy covers you against such expenses.
Add-on Covers with Digit Car Insurance
Car insurance add-ons which you can buy with your car insurance policy
Ideal for cars less than 5 years old, zero depreciation cover allows you to nullify the depreciation charged on your car and its parts and gives you the full value of repairs, costs and replacements during a claim.
In case of theft or damages beyond repair, return to invoice add-on gives you the benefit of getting back the complete amount of your car's invoice value, including the cost of registering a new vehicle and its road tax respectively.
Generally, tyre damage isn't covered in standard insurance unless the damage takes place during an accident. That's why this tyre protect add-on gives you the benefit to safeguard and cover for tyre damages such as tyre bursts, bulges or cuts during all other situations possible.
We all need a little help sometimes! Our Breakdown Assistance Add-On gives you the benefit of taking help whenever required, i.e assistance during car breakdowns at any time you'd like. The best part? It doesn't even count as a claim!
A consumable cover gives your car an additional layer of protection. It covers the cost for all your car's nitty-gritties, such as the engine oils, screws, nuts and bolts, grease, etc in a situation of an accident.
Do you know that the cost of replacing your engine is approximately 40% of its cost? In a standard car insurance policy, only damages caused during the accident are covered. However, with the engine and gear-box protection cover, you can specifically cover for the life of your car (the engine and gearbox!) from any consequential damages caused post the accident.
The Daily Conveyance Benefit add-on offered by insurers ensures that policyholder gets compensated for daily transport in the form of a fixed daily allowance or a standby vehicle for the time when the insured vehicle is in the garage for repairing.
The cost incurred by the policyholder for repairing or replacement of the lockset in the car in case of theft, loss or damage is covered by the insurer as part of the Key and Lock Protect add-on cover.
If the policyholder or any immediate family member suffers from any loss of personal belongings specified as per the policy when kept in the insured vehicle, it shall be compensated by the insurer.
Pay as you drive cover makes the policyholder eligible to avail discount on the premium of Own Damage cover of the base policy based on the opted plan. The option to top up kilometers is also offered under the base policy by paying additional premium.
This EV Shield add-on cover for electric cars in India will protect you and your vehicle against any loss or damage to the electrical panel for the vehicle charging point, vehicle charger including charging cable, and offer roadside assistance services specific to EVs.
Which Car Insurance Policy is the Best for You?
Case 1: If you bought a new luxury car
Buying a luxury car is a one-time deal for most owners, thus, you must protect it with comprehensive car insurance to cover both third-party liability and own damage. Appropriate add-ons for luxurious cars are necessary too.
You can get a Zero Depreciation Cover to claim the full value of repairing/replacing its expensive parts. A Return to Invoice Cover will be useful for luxury cars as it ensures that you receive the original invoice value of your car in case of theft or total loss.
An Engine Protection Cover is a must for luxury car since it is an expensive component of the car, and this cover will protect you against all engine and gearbox repairs. Also, it's better to get a consumables cover to cover the replacements cost of lubricants, oils, nuts, bolts, screws, washers, grease, etc.
Case 2: If you own a 7-year-old car that you drive daily
Most car owners tend to ignore the importance of car insurance if you have a 7-year-old car; however, having at least third-party insurance is mandatory from the legal perspective. Since your car is already 7 years old, it is advisable to have own-damage cover to get coverage for repairs or replacement of your car in case of accidents, theft, fire, natural calamities, etc.
Also, getting a comprehensive cover with add-ons like a Roadside Assistance add-on will safeguard you on long road trips if your car breaks down, has a flat tyre or requires towing.
Case 3: If you’ve preserved your grandfather’s car that rarely hit the roads
People keep some things solely for the emotional value attached to them like that car in your family for generations, which is rarely driven but still requires to be insured via at least a third-party coverage policy as per legal requirements. Since you do not drive that car around, you can skip purchasing other add-ons.
FAQs about Types of Car Insurance
Is it mandatory to get car insurance?
Yes, getting at least a third-party car insurance is mandatory in India. However, getting a comprehensive car insurance policy is highly recommended as it protects your car against both third-party liabilities and own damage.
How many types of car insurance in India are there?
There are 3 types of car insurance - third-party insurance, comprehensive insurance, and standalone own-damage insurance. The other two types of coverage include personal accident cover and uninsured motorist protection.
Which is the best type of car insurance?
Comprehensive car insurance is generally considered the best as it covers both third-party liabilities and damage to your own car.
What is the most common type of car insurance?
The most common type of car insurance is the third-party car insurance, as it is mandatory by law and has a lower premium.
Which type of car insurance policy has a high premium?
The premium for comprehensive car insurance is higher than the other car insurance types in India. This is because comprehensive car insurance offers more protection and allows you to get add-ons which further increase the premium.
What is an add-on in car insurance?
Add-ons in car insurance are additional coverages offered along with the base car insurance policy to provide enhanced protection, such as zero depreciation, roadside assistance, engine protection, and more.
Which car insurance types cover passenger injury?
You need to have a Passenger cover to cover the passengers in the insured car. This add-on is available only with comprehensive and own damage car insurance policies.
Does car insurance cover 100% damage or loss costs?
No, car insurance does not typically cover 100% of all costs. There are usually deductibles, limits, and exclusions.
Can I switch from third-party car insurance to comprehensive plan?
Yes, you can switch between different car insurance types while renewing your car insurance policy; however, the premium may differ depending on the plan you choose.
What is a bumper to bumper cover in car insurance?
Also known as zero depreciation, bumper to bumper car insurance cover ensures that the deprecation cost is not considered at the time of claims and that you are paid the full cost of repair or replacement.
Is it mandatory to have personal accident cover?
Yes, it is mandatory for all car owners in India to have personal accident cover as part of their car insurance policy.
How do I know which is the best car insurance policy for me?
To get the best type of car insurance policy, research different insurance companies, determine your budget, and based on the type of car you have or your driving habits, choose the car insurance plan most suitable for you.