Motor Insurance Companies in India

Having car insurance prevents financial burdens caused by unexpected incidents. It also ensures the vehicle remains legally compliant, avoiding legal complications. A well-chosen insurance plan provides peace of mind, security, and uninterrupted driving experience. 

List of Motor Insurance Companies in India:

Types of Motor Insurance:  

The types of motor insurance available in India are mentioned below -  

1. Third-Party Liability Insurance 

Third-party liability insurance is the most basic and legally mandatory motor insurance policy in India. It covers damages and liabilities caused to a third party but does not provide any coverage for the insured vehicle. Since third-party insurance is a legal requirement, driving without it can result in heavy fines or penalties. The policy premium is regulated by IRDAI and depends on the vehicle’s engine capacity.  

This policy includes: 

1. Third-Party Vehicle Damage: Covers repair or replacement costs if the insured vehicle damages another vehicle. 

1. Medical and Hospitalisation Expenses: Covers treatment costs for injuries sustained by third parties due to an accident caused by the insured vehicle. 

1. Liability for Death or Disability: Provides compensation in case of severe injuries or death of a third party. 

2. Own Damage (OD) Insurance 

Own Damage insurance offers financial protection for damages to the insured vehicle. This is an optional standalone cover available only if the vehicle owner has an active third-party insurance policy. Own damage insurance is ideal for vehicle owners looking for added protection against unexpected expenses. 

 It includes: 

1. Natural Disasters and Calamities: Covers damage caused by floods, earthquakes, cyclones, landslides, and other natural disasters. 

1. Man-Made Events: Provides coverage for losses due to riots, vandalism, arson, or malicious acts. 

1. Total Loss or Theft: Offers financial compensation if the vehicle is stolen or declared a total loss due to extensive damage. 

1. Accidental Damage: Covers repair costs if the insured vehicle is damaged in an accident. 

3. Comprehensive Motor Insurance 

Comprehensive motor insurance provides all-around protection by combining third-party liability and own-damage coverage. Since this policy offers maximum coverage, it is more expensive than third-party insurance but provides greater financial security.  

This is the most extensive type of motor insurance and includes: 

1. Third-Party Coverage: Covers liabilities for injuries, fatalities, and property damage caused to a third party. 

1. Own Vehicle Protection: Covers repair costs for damages caused by accidents, natural disasters, fire, theft, or vandalism. 

1. Personal Accident Cover: Provides financial assistance for injuries or death of the policyholder due to an accident. 

1. Customisation Options: Policyholders can enhance coverage with add-ons such as: 

1. Zero Depreciation Cover: Ensures full claim settlement without considering depreciation. 

1. Roadside Assistance: Offers towing, fuel delivery, and breakdown assistance. 

1. Engine Protection Cover: Covers damages to the engine due to waterlogging or oil leakage. 

1. Consumables Cover: Covers costs of consumables like engine oil, brake fluid, and lubricants. 

4. Personal Accident Cover 

A Personal Accident (PA) Cover is designed to offer financial protection for medical expenses incurred due to an accident involving the insured vehicle. PA cover is mandatory for vehicle owners and can be extended to passengers through optional add-ons. 

It provides: 

1. Medical Expense Reimbursement: Covers hospitalisation, treatment, and rehabilitation costs. 

1. Disability Compensation: Provides financial support in case of partial or total disability caused by an accident. 

1. Accidental Death Benefit: Offers a lump sum payout to the nominee in case of the policyholder’s death due to an accident. 

What is Included in Motor Insurance? 

The following things are included in motor insurance are mentioned below -  

1. Damage to the vehicle due to fire: If your vehicle suffers damage or destruction due to a fire, motor insurance policies cover the repair or replacement costs. This includes cases of accidental fire, self-ignition, or fire caused by an external source, ensuring financial protection against such incidents. 

1. Damages caused by terrorist acts or riots: In the unfortunate event of civil unrest, terrorism, or riots, your vehicle may sustain damage due to acts of vandalism or destruction. Most motor insurance policies offer coverage for damage caused by such man-made disasters, protecting you from the high costs of repair. 

1. Damage due to theft: If your vehicle is stolen, motor insurance provides compensation for the loss. Coverage may include the cost of replacing the vehicle or covering damages that occur if the vehicle is partially recovered. Theft-related coverage is crucial in preventing significant financial losses. 

1. Damages caused by natural calamities: Natural disasters such as floods, earthquakes, cyclones, or storms can lead to severe damage to your vehicle. A comprehensive motor insurance policy typically covers such risks, ensuring your vehicle is protected from nature's unpredictable events. 

1. Accident-related damage to the insured vehicle: If your vehicle is damaged in an accident, motor insurance policies provide coverage for repairs or replacements. This includes collision-related damage, dents, scratches, or any impact-related issues. Standalone own damage and comprehensive policies offer these benefits. 

1. Third-party liability: One of the most important aspects of motor insurance is third-party liability coverage. If your vehicle causes damage to another vehicle or property, or if it causes injury or death to a third party, the insurance will cover the legal expenses and the compensation. This ensures you are protected from potentially high financial liabilities. 

1. Personal accident cover: This coverage offers financial assistance in case of injuries or death resulting from an accident. It typically includes medical expenses for the driver and passengers. Personal accident cover ensures that you or your family are not burdened by financial hardships due to accident-related injuries or fatalities. 

1. Zero depreciation cover (if opted for): Zero depreciation cover ensures that the entire cost of repairing or replacing damaged parts is paid out without accounting for depreciation. This option is particularly beneficial for new vehicles, as it provides higher compensation for repairs or replacements, ensuring the vehicle owner doesn't suffer financial loss due to the vehicle’s age. 

1. Add-on covers: Many insurers offer additional add-on covers to enhance the protection provided by a motor insurance policy. These may include roadside assistance, engine protection, consumables coverage, and more. Add-ons provide extra benefits to address specific concerns, offering greater flexibility and security. 

What is Excluded in Motor insurance? 

The following things are excluded in motor insurance -  

1. Riding/driving with a lapsed policy: If your insurance policy has expired and you have not renewed it, the coverage will not be valid. Any claims made during this period, even if the incident occurs before the policy expires, will not be honoured. It’s essential to ensure your policy remains active by renewing it before the expiration date. 

1. Claiming against non-covered incidents: Each policy has a set of terms and conditions that define what is covered and what is excluded. If you file a claim for an incident that is not explicitly mentioned or covered by the policy, the insurer will deny the claim. Always review the policy document to understand the limitations and exclusions. 

1. Riding/driving while inebriated: Claims are typically not covered if the driver is found to be under the influence of alcohol, drugs, or any other intoxicants at the time of the incident. This exclusion protects insurance companies from covering damages caused due to reckless driving or impaired judgment. 

1. Personal items taken from your vehicle: Most motor insurance policies do not cover the theft of personal items from your vehicle, such as electronics, bags, or any other belongings. These items are considered personal property and are not part of the vehicle’s coverage. For protection of personal belongings, a separate home or travel insurance policy is recommended. 

1. Repair/replacement due to wear and tear: Routine wear and tear, such as the deterioration of parts due to regular use, is not covered under motor insurance policies. This includes issues like worn-out tyres, brake pads, and other components that naturally degrade over time. Insurance only covers accidental damage, not the normal usage-related deterioration of the vehicle. 

1. Driving without a valid license: If the driver does not have a valid driver’s license at the time of the accident, the motor insurance policy will not cover the damages. It is a legal requirement to drive with an active and valid license, and failure to do so renders the insurance void. 

1. Driving outside the coverage area: Some motor insurance policies have geographical limitations. If your vehicle is driven outside the specified area mentioned in the policy, the insurer may refuse to honour the claim. It’s important to know where your policy applies, especially when travelling across regions or internationally. 

1. Underinsured or uninsured vehicles: If the vehicle is underinsured (with insufficient coverage) or uninsured (without any valid insurance policy), the insurance company will not cover any damage or losses. Always ensure your vehicle is insured adequately, reflecting its current market value and potential risks. 

Add-Ons Provided By Motor Insurance Companies 

Motor insurance policies in India offer a wide range of add-on covers to provide additional protection and flexibility, catering to specific needs and preferences. Here are some of the most common add-ons offered by motor insurance companies in India: 

• Car Roadside Assistance Cover: The Roadside Assistance Cover provides emergency services to the vehicle in case it breaks down while on the road. This service typically includes assistance with flat tyres, battery jump-starts, fuel delivery, lockout services, and towing to the nearest garage. This add-on is particularly useful when travelling long distances or in areas with limited access to services, ensuring that you are never stranded without help.   

• Consumable Cover: The Consumable Cover provides coverage for consumables like engine oil, brake oil, coolants, nuts, bolts, and other essential items that are required to keep the vehicle running smoothly. These consumables are typically not covered under standard motor insurance policies, as they are considered wear-and-tear items. This add-on ensures that the cost of consumables is covered in case of an accident or repair.  

• Passenger Cover: The Passenger Cover is an add-on that provides protection to the passengers in the vehicle in case of an accident. It covers medical expenses, injury, or death resulting from the incident, ensuring that your passengers are financially protected. This cover can be particularly useful for families or drivers who frequently carry passengers, as it offers peace of mind in case of unfortunate events.   

• Accessories Cover: The Accessories Cover provides protection for non-standard accessories fitted to the vehicle, such as high-end audio systems, custom seats, GPS devices, or any additional accessories that are not part of the vehicle’s factory-fitted components. This cover compensates for the loss or damage of these accessories due to theft, accidents, or other covered incidents.   

• NCB Protection Cover: The No Claim Bonus (NCB) Protection Cover protects your No Claim Bonus, which is a discount offered by insurers for claim-free years. With this add-on, even if you file a claim, you will not lose the NCB, ensuring that you continue to receive discounts on your future premiums. This is a valuable cover for those who want to maintain their premium benefits, even in the event of a claim.  

• Return to Invoice Cover: The Return to Invoice Cover ensures that in the event of total loss or theft of the vehicle, the owner receives the full invoice amount of the vehicle, including the on-road price and applicable taxes. This add-on helps to bridge the gap between the current market value (which may be lower) and the actual cost of the vehicle, protecting the owner from financial losses in the case of theft or irreparable damage.  

• Zero Depreciation Cover: The Zero Depreciation Cover is one of the most popular add-ons for new car owners. It ensures that the insurer compensates the full cost of repairs or replacement of damaged parts without accounting for depreciation. This is particularly beneficial for vehicles that are new or have a high resale value, as it helps cover the total cost of repairs and ensures that the policyholder is not penalised for the vehicle’s age or wear and tear.  

• Engine Protection Cover: The Engine Protection Cover provides protection for the vehicle’s engine and related parts against water ingress, oil leakage, or damage caused by external factors such as accidents or floods. This is an essential add-on, especially in areas prone to flooding or heavy rains, as engine repairs can be costly. This cover helps reduce the financial burden in such circumstances.  

• Personal Accident Cover: The Personal Accident Cover is designed to protect the vehicle owner and passengers in case of an accident. It covers medical expenses, permanent disability, and accidental death. This add-on is crucial for providing financial support to the insured and their family members in the event of a serious accident. It can also be customised for a higher sum assured to cover additional expenses.   

• Loss of Personal Belongings Cover: The Loss of Personal Belongings Cover is an add-on that protects personal items left in the vehicle, such as mobile phones, laptops, or bags, in case they are stolen or damaged during an accident. Since most standard policies do not cover personal belongings inside the vehicle, this add-on ensures that the policyholder is compensated for the loss of valuable items.   

• Tyre and RIM Damage Cover: The Tyre and RIM Damage Cover provides protection against damage to the vehicle’s tyres and rims caused by external factors such as accidents, road hazards, or vandalism. This add-on is particularly useful for drivers who frequently drive in areas with poor road conditions, as tyre repairs or replacements can be expensive. It covers the cost of replacing or repairing damaged tyres and rims.   

• Daily Protection Cover: The Daily Protection Cover ensures that you have a temporary vehicle in case your insured vehicle is undergoing repairs due to an accident. This add-on provides a daily rental allowance for a replacement vehicle, helping you continue with your daily activities without disruption. It’s a valuable add-on for individuals who rely on their vehicle for work or other important commitments. 

Eligibility Criteria for Motor Insurance: 

The eligibility criteria for motor insurance are mentioned below - 

1. The insurer should own a valid registration certificate.
2. The motor vehicle should be registered under the owner’s name. 

Documents required by motor insurance companies to buy vehicle insurance in India 

To buy vehicle insurance in India, you need to submit the following documents: 

• Car insurance proposal form: A completed form providing basic details of the vehicle and owner. 

• Copy of registration certificate: A copy of your vehicle's registration document for verification. 

• Identity proof: Government-issued identity proof, such as Aadhar card, PAN card, or voter ID. 

• Address proof: Documents like utility bills, rental agreements, or bank statements for address verification. 

• Driving license: A valid driving license to prove that you are eligible to drive the vehicle. 

• Passport size photograph: A recent passport-sized photograph of the vehicle owner for records. 

How to Apply for Motor Insurance in India?

You can contact your preferred insurance companies to know more about how you can apply for motor insurance. 

Benefits of Motor Insurance:

Motor insurance protects the vehicle owner from the following risks: 

• Accidental Injuries, Disabilities, or Death of the Owner - A protects the vehicle's owner-driver from accidental injuries or death. Permanent partial/total disabilities are also offered coverage under the plan. Additionally, the policyholder can choose to protect the named passengers in the vehicle through a personal accident add-on cover. The coverage offered by a comprehensive motor insurance plan can be amplified by purchasing appropriate add-on covers from the same insurance company. 
• Own Damages - A part of the comprehensive motor insurance coverage offers protection for the insured vehicle from the following incidents: 

1. Theft and burglary 
2. Accidental damages 
3. Losses incurred while in transit via rail, road, air, inland waterways, and lift 
4. Damages suffered from natural calamities such as earthquakes, typhoons, lightning, cyclones, landslides, etc. 
5. Losses due to man-made disasters such as strikes, terrorist activities, malicious acts, etc. 

How to Calculate Incurred Claim Ratio?

For a specific duration, the incurred claim ratio (ICR) is essentially the ratio of the value of total claims paid out by the company to the total amount of premium that it collects, represented as a percentage. When buying motor insurance, it is advisable to select an insurer with a high incurred claim ratio, as it indicates that the company is successfully paying out the claims raised by policyholders.

So for instance, if a company settles a total claim amount of Rs.78 crore in a year and the total premiums collected is Rs.100 crore, the incurred claim ratio is calculated as shown below:

If the ICR is above 100%, it indicates that the claims paid out are more than the premiums collected, i.e., the company is running at a loss.

It should be noted that ICR is not the only point to note when buying motor insurance from a company. There are several other factors as well; so consider all aspects of the insurance company and the product before making a purchase.

What factors affect the premium cost of motor insurance in India? 

Several factors determine the premium cost of motor insurance in India. Here is a breakdown: 

• Model, Capacity, and Fuel Type: Higher-end models, larger engine capacities, and diesel or luxury cars often come with higher premiums due to their repair costs. Fuel type, like diesel or electric, can also impact the premium. 

• Geographical Location: Areas with higher theft, accident rates, or natural calamities tend to have higher premiums. Cities with heavy traffic congestion may also raise your insurance cost. 

• Age and Profession of the Vehicle Owner: Younger, less experienced drivers often face higher premiums due to increased risk. Certain professions, like long-distance truck driving, may also attract higher premiums. 

• No Claim Bonus (NCB): A claim-free history earns a discount called No Claim Bonus (NCB), lowering your premium. The longer the claim-free period, the higher the discount. 

• Claim Settlement Ratio: Insurers with higher claim settlement ratios may charge slightly more for their reliability and service, though it ensures better support during claims. 

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