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Quick Guide to Motor Car Insurance

Car Insurance

Car insurance or Motor Insurance is a legal contract between a car owner and a general insurance company wherein the latter promises to protect the vehicle owner from unforeseeable financial losses which may occur due to unforeseen event involving his/her vehicle. It provides monetary compensation to the policyholders in the event their car is stolen or damaged due to any such circumstances. Individuals has an option to select from the three types of car insurance.

As per the Motor Vehicles Act, it is mandatory for all vehicles plying in any public space to have a motor insurance cover. In India, policyholders must have at least 'third party liability' motor insurance cover, even when opting for the basic insurance plans.

What is Car Insurance?

A car insurance is a legal contract between a car owner and a general insurance company wherein the latter promises to protect the car owner from any financial losses which may occur due to an unforeseeable event involving his/her car. There are three types of car insurance plans-third party insurance, comprehensive insurance and standalone own-damage car insurance. One can renew car insurance policy online to get an instant e-Policy.

Key Features of Car/Motor Insurance Policy.

Car Insurance key Feature and Benefits:

CategoryKey Features
Third-party damagesDeath, injuries & property damages
Own damage coverAvailable under standalone and comprehensive
No Claim BonusUp to 50%
Insurance premiumStarting at ₹2094
Add-on coversMore than 10 add-ons such as NCB protect, Personal Baggage, etc.
Buying/Renewal ProcessOnline
Personal accident coverUp to ₹15 lakh
Cashless Garages/RepairsAvailable

Some other add-on benefits that are on offer along with care insurance are:

  • Zero Depreciation Cover
  • Personal Accident Cover
  • Driver/passenger Cover
  • Engine Protection
  • Lock Key Replacement Cover
  • 24X7 Roadside Assistance/Towing Facility
  • Conveyance Benefits

Type of Car Insurance Policy in India

There are 3 types of car insurance policies defined on the basis of scope of coverage:

  • Third-party liability Insurance policy – As per India’s Motor Vehicles Act, it is mandatory to hold at least a third-party liability cover for all car owners. All the car owners must have this policy to drive on the roads, across the country. Under this policy compensation is provided for damages/injuries caused by insured to a third-person, and property. However, It does not cover any damages caused to the insured car. Therefore, it is always to buy a comprehensive or standalone car insurance policy.  
  • A comprehensive car insurance policy – This policy covers both third-party liabilities and own damages. Under the plan the policyholder can avail cashless repair services at the network garages of insurer. In this policy option person can opt for various add-on benefits and riders at nominal extra cost.
  • A standalone own damage car Insurance policy – This policy financially covers the accidental damages caused to the insured car and can be purchased with an already active third-party insurance. Having a stand-alone insurance offers financial over in case of own damages to the insured car and third-party liabilities as well.

How to calculate Car Insurance Premium?

Car insurance premium of third-party insurance plans is determined by the IRDAI, whereas the premium for standalone own-damage and comprehensive plans vary from one insurer to another insurer. Some factors which affect the premium for own-damage four-wheeler insurance cover are::

  • Insured Declared Value – The Insured Declared Value (IDV) is the current market value of the four-wheeler and is one of the important factors which affect the calculation insurance premium. It is the amount which insurer pay the policyholder in the event of total loss of car. A higher IDV will attract a higher car insurance premium.  
  • Engine Cubic Capacity – Greater the car’s cubic capacity, higher is the car insurance premium.
  • Age of the Car – With the passage of time the value of the four-wheeler reduces due to depreciation. Therefore, greater the age of car, lower the insurance premium.
  • Make, Model and Variant – The make, model and variant of the car affects the IDV of a car. For different make, model and variants of the car, different insurance premium is applicable.
  • RTO Location – RTO location of your car gives the insurance company an idea about the traffic conditions and density of traffic in the area/city where the car will be driven. So, motor insurance premium is calculating taking account the probability of road accidents and other mishaps.

How to compare Car Insurance / Motor Insurance Online?

Comparing car insurance online is not at all a tricky process now a days. All you need is an internet connection and a few minutes to compare insurance plans online. Same goes for motor insurance which has vehicles like cars, two-wheelers, and other road vehicles under its ambit. You can buy motor insurance cover for your vehicle against the damages caused by natural disaster and accidents.

Here is how you can compare car insurance online:

  • Step 1 – Visit the
  • Step 2 – Select ‘Motor Insurance’
  • Step 3 –Enter registration number along with other details of your vehicle such as model, variant, RTO, etc.
  • Step 4 – You will now find the car insurance/motor insurance plans of multiple insurance companies. Here you can easily compare car insurance or motor insurance price basis; type, coverage, add-on, IDV, premium etc. You can then purchase the most suitable motor insurance online using safe payment modes.

Coverage Under Car Insurance Policy

Car Insurance Policy Inclusions:

  • Damages caused to the insured vehicle due to man-made acts like riots, arson, terrorist acts etc.
  • Any third-party damage like third party death, disability and property damage are covered under the motor insurance policy
  • Losses arising out of burglary, theft or housebreaking of the insured car
  • Damages sustained by the insured car due to natural acts like earthquakes, hurricanes, cyclones, etc.
  • Damages caused to the insured car while it was in-transit via roads, railways, waterways etc.

Whats Not Covered Under Car/Motor Insurance Policy

Car Insurance Policy Exclusions:

  • Damages caused to the insured car when it’s driven under the influence of alcohol or drugs
  • Damages to the insured vehicle if the car driver was not carrying a valid driving license
  • Damages arising out of commercial uses of any private car is also excluded.
  • Any loss arising out of any contractual liability of the owner/driver
  • No claim can be raised if your existing car insurance policy has lapsed
  • Mechanical or electrical failure of the insured vehicle
  • Any damage arising out of the specified geographical limits are also not covered under car insurance policy
  • Damages to engine, tyres and tubes of the insured car/motor vehicle are also not covered

Add on Covers in Car/Motor Insurance Policy

List of add-ons in car insurance/motor insurance are:

  • No Claim Bonus Protection Cover – For every claim-free year, the insurer rewards car insurance policyholder with a discount on the renewal premium. This discount is called - No Claim Bonus (NCB) and ranges from 10% to 50%.
  • Engine Protection Cover – With this motor insurance cover you can get compensated for the cost of fixing damages to Engine, Gearbox parts, Engine parts, differential Part etc, due to oil leakage or water ingression,
  • Zero Depreciation Cover –This feature offers compensation even for the depreciating value of your car.
  • Consumables Cover –Covers the expenses incurred on consumable items like nuts and bolts, AC gas, grease, lubricants, clips, bearings, engine oil, brake oil, etc.
  • Key Protection Cover –The car insurance company can offer help by covering the costs incurred on the replacement and repair of your car keys.
  • Daily Allowance Benefit –Under this motor insurance when your vehicle is parked in the garage for repair for more than 3 days, the insurer will provide you a daily travel allowance.
  • Personal Accident Cover –A comprehensive car insurance policy besides providing third-party cover also offers cover for personal accidents. Under personal accident cover, you get a pre-defined amount against death because of the accident and permanent total disability.
  • Roadside Assistance Cover –In case you get stuck somewhere, the insurance policy, the insurer provides you with roadside assistance and sends a mechanic to your location to fix the damage caused to your car.
  • Return To Invoice Cover –Under Return to invoice add-on, if your car gets stolen or gets damaged beyond repair that is known as a total loss then the insurer will have to provide coverage as per the amount of invoice that you paid at the time of purchasing the car. This cover includes ex-showroom price, road tax and first-time registration charges.
  • Personal Possession Cover –With this add-on cover, one gets the coverage in case he/her personal possessions get damaged in an unfortunate car accident or get stolen from the car when it is parked in an authorised parking lot.
  • Tyre Protection Cover –A tyre protection cover can be purchased as add-on under this car insurance.
  • Driver and Passenger Cover –Under this motor insurance policy add-on, one gets coverage in case any of the drivers or passengers get injured in the accident. The insurer will provide financial aid for the medical expense.

Points to Consider while selecting Car / Motor Insurance Policy

  • Know what your requirements are – Before you start looking for a car insurance plan, you must first assess your insurance needs, determining the type of insurance cover you want to buy, any additional covers required, premiums, etc. Ideally, you should look for an insurer that offers comprehensive coverage at an affordable price, together with an easy claim process and faster processing of claims.
  • Compare car insurance quotes online – When buying car insurance, you must compare quotes online. By entering your requirements in an online quote request-form you can access instantly.
  • Choose a provider with a wide network of garages and workshops –When you are looking for a car insurance provider, make sure to check its list of network garages. Choose an insurance company that has a wide network of garages with facility of cashless claims.
  • Check the claim data –One should choose a car insurance company with history of the best claim settlement ratio and an easy claims process. Claim data about different insurance providers can easily be found online.
  • Accumulate No claim Bonus –Accumulating No Claim Bonus (NCB) is a popular way to reduce car insurance premiums. You can accumulate up to 50% NCB and use it later.
  • Get zero-depreciation cover –A zero-depreciation insurance will help you get complete reimbursement for the car parts replaced without any deduction for depreciation. This cover comes at an extra cost with your car insurance.
  • Consider buying car insurance online –The most obvious advantage of buying insurance online that you have a wider choice, save time and money.

How to Buy Car / Motor Insurance Online

The process of buying a car insurance or motor insurance online is quite simple and easy. Here’s how you can buy the right insurance online:

  • Fill in Your Car Details – Enter your car details such as its make, model, variant etc, to see insurance prices offered by top car insurance providers in India.
  • Compare Car Insurance Quotes – From all the available Motor insurance online plans, select the plan which suits your budget & requirements in the best manner.
  • Make Payment Online –Pay the policy premium for car insurance online and get your Motor insurance document instantly in your inbox.

Benefits of Buying Car Insurance Online

Below are some key benefits of buying an insurance online:

  • Multiple policies can be compared at a time
  • You get the best deal in terms of premium
  • Minimum to nil paperwork involved
  • Convenient to buy
  • Instant policies issue
  • Checking the credibility of the insurer is much easier online
  • You get genuine policies
  • Does not require meeting of an agent

How to Renew Car / Motor Insurance Online

To renew motor insurance policy, visit your insurance provider's website to fill in the details such as; your existing car insurance policy number, car registration number, mobile number and email address. Enter the policy details and review add-on covers you would like to opt-in and opt-out of. Select your preferred add-on(s) and complete the process by paying the premium amount via online payment gateway.

Benefits of Car Insurance Renewal Online

Buying and renewing car insurance online is a common practice now a days. By purchasing a car insurance policy online has a clear advantage over offline mode because of the following reasons:

  • Buying process – Insurance can be purchased online from insurers’ official websites or insurance marketplaces, using smartphone or computer.
  • Insurance Premium – When you buy or renew car insurance online, you pay lower premium. Buying policy online involves lower operational cost and no involvement if agent.
  • Convenience –You can buy or renew car insurance policy from the comfort of your home, without any need to meet an insurance agent.
  • Transparency –Buying and renewing car insurance online is a transparent process with best premiums rates shown online to choose from and no involvement of intermediaries.
  • Customer Support –It is much easier to connect with customer support team 24X7 through email and phone.
  • Paper work –Buying/renewing car insurance online involve minimum or zero paperwork.
  • Renewal Process –Renewing car insurance online is very easy as your policy details are auto-saved with the insurer.

How to file a Car / Motor Insurance Claim?

The process of filing a claim for car insurance involves a few steps. Follow below guide for raising a claim against your car insurance policy:

  • Intimate your Insurer – As a first step, insured must intimate car insurance company about the car mishap and provide them with as much information as available about the damages.
  • Register an FIR – File an FIR at Police Station nearest to you in case of theft, accident, third-party loss, or fire explosion.
  • Take Pictures of the Damaged Car For effective filing of car insurance claim, you should take clear photographs of the damaged car from different angles at the incident site.
  • Assessment & Evaluation –A surveyor is assigned by your car insurance company to evaluate the damages to your car and submits an assessment report to the insurance company.
  • Submit Required Documents to the Insurer –A list of documents is required to be submitted for completing the claim process. It includes documents like the FIR, the driving license of the driver, a copy of your insurance policy, car registration certificate, etc.
  • Get Your Car Repaired –Get your car fixed cashless at a network garage of the insurer or take it to a non-approved garage for repairs. In the case of network garage, one can take the car home without paying the bill as it will be settled by your insurer. In the case of a non-network garage, you will have to settle the bill after repair and file a reimbursement claim with your insurer. Once your claim is approved by the insurer, you will be reimbursed for your expenses.

Documents Required for Filing a Car / Motor Insurance Policy Claim

Following documents are required to process a claim in case of an accident claim:

  • Filled claim form along with your signature
  • Tax receipts
  • Copy of your car registration certificate (RC)
  • Driving license of the driver
  • Copy of the FIR
  • Estimated bill of your car's repair cost.
  • Original repair bills and payment receipts
  • Car inspection address, if not done at a garage

Document required to process a claim in case of theft of insured car:

  • A copy of the insurance policy document
  • Theft declaration from the RTO
  • Policy FIR copy
  • Letter of subrogation
  • Tax payment receipts
  • Original car registration book
  • Previous policy details like insurer company name, duration & time if insurance
  • Items like booklets, warranty cards, duplicate keys, etc.
  • Forms 28, 29, 30 and 35
  • Official intimation to respective RTO about theft and discontinuation of the vehicle
  • Claim Discharge Voucher along with a revenue stamp duly signed

In case of Third-party claims, following document would be required:

  • Duly filled and signed claim form
  • Copy of the Police FIR
  • Copy of Registration Certificate (RC) and Driver's License (DL)
  • Stamp needed for company-registered vehicle's original documents

Why should you buy a Car Insurance Policy from SecureNow?

SecureNow’s expertise is more than just about insurance policies. Our extensive training and experience focus not only on specific types of insurances, but also risk management. We can help you to get the right car insurance plans, by actively working as an advisor on your behalf. It doesn’t cost you anything extra to use our services. We as an insurance broker;

  • Listens and understands your car's coverage needs
  • Help you to find the right car insurance policy, one that suits your individual requirement
  • Offers objective and impartial advice that is appropriate to your vehicle's insurance needs and fits your budget
  • Help you understand the insurance plan, its coverage, and exclusions, honestly and clearly
  • Maintain a transparency regarding to all costs of your policy
  • Provide clear information help you with the paperwork
  • Assist you with filing a claim and efficient service from the insurance company

Frequently Asked Questions

Some of the major reasons why one must have car insurance and also ensure timely motor insurance renewal, include:
  • Reduces liability
  • Pays for damages
  • Buying motor insurance online is cheaper
  • Pays for hospitalization
  • Family receives compensation in the unfortunate event of death
  • Pay premiums on time and always enjoy coverage
  • The Insured Declared Value (IDV) defines the market value of the car for insurance purpose. IDV is the maximum claim your Car insurance company will pay if your vehicle is stolen or is damaged beyond repair.
    Zero depreciation cover is an add-on in car insurance, wherein the insured does not have to pay the depreciation value of the damaged or replaced parts. It is also known as bumper to bumper or nil depreciation cover. Under this add-on the policyholder can claim the full amount as compensation. Most insurers do not offer this add-on for vehicles that are more than 5 years old and the policyholder can avail of it twice during the policy tenure. More recently, a few insurers have also started offering a 7-year zero dep cover. Further, there are some car models which are not covered by a Nil Depreciation policy.
    Yes, car insurance is mandatory in India for multiple reasons but the foremost among them being the rising number of road accidents in India. The Motor Vehicles Act, 1988 states that owner-drivers of the car must carry at least a valid third-party car insurance policy.


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