Insurance is like a spare tyre. You may not require it, but not having one is not an option.

How To Buy The Best Car Insurance Plan

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If you own a car and use it for your daily commute, you need to buy car insurance. This has been mandated by the law in India. But what you should understand is the amount of car insurance you actually need to be safe on the roads.

You could stay on the safe side of the law and opt for the bare minimum level of car insurance, i.e., the third-party liability insurance. On the other hand, you can also make a prudent insurance purchase decision by opting for a comprehensive package that offers you extensive coverage.

Motor insurance companies today offer a wide range of products, such as limited cover, extensive cover, and add-on covers. If you buy a comprehensive car insurance policy, you can mix and match the add-on covers to suit your specific needs. Irrespective of whether you are a teenager with a brand new driving license or a travel enthusiast who embarks on long drives every weekend, there is a car insurance policy for your requirements.

But since car insurance policy brochures are filled with technical jargons, the process of deciding on an appropriate insurance plan may be daunting. Here, we try to unravel the complications in the fine print, so that you can make a judicious decision at the time of insurance purchase.

Understanding Car Insurance:

Car insurance policies can be broadly classified into two main types:

  1. Third-party liability insurance - This plan is also referred to as liability-only policy or act-only insurance. It offers a minimal level of insurance coverage, specifically for the liabilities to third parties in an accident. It covers third-party injuries, death, or property damage. The liability-only cover does not protect the insured vehicle itself. This also happens to be the most basic level of car insurance mandated by the Motor Vehicles Act.
  2. Comprehensive car insurance - The comprehensive car insurance plan has more elaborate coverage. The plan offers third-party liability insurance and own-damage cover. Own-damage cover includes the losses incurred by the policyholder from the following events:
    1. Car theft
    2. Damages due to external accidents
    3. Damages while in transit via rail, waterways, road, lift, air, etc.
    4. Damages to the car due to natural calamities such as floods, hurricanes, typhoons, etc.
    5. Damages from man-made disasters, such as strikes, riots, vandalism, etc.
    6. Accidental injuries or death of the owner-driver

The comprehensive car insurance policy can be enhanced by opting for add-on covers. The policyholder will have to pay extra premium for buying add-on covers.

All claims related to third-party liabilities will be settled in the Motor Accident Claims Tribunal (MACT) and is a long-winded process.

How Is The Premium Decided?

Most insurance companies determine the premium for your car insurance based on the following categories of risks:

  1. Risks related to the vehicle - This includes model and make of the vehicle, cubic capacity, fuel type, etc. Diesel vehicles have higher premiums than petrol cars. SUVs and commercial vehicles are also charged higher premiums. The age of the vehicle and its IDV at the time of renewal are also key factors that influence the premium.
  2. Risks related to the owner-driver - The profession and age of the driver influences the premium.
  3. Risks associated with location - The area of registration has a bearing on the car insurance premium. Premiums are usually high for localities that are densely populated and near the highways. If you live in an area prone to thefts, you are likely to pay a higher premium.
  4. Risks associated with claims history - Raising a car insurance claim can lead to higher premiums the following year.

How To Reduce Car Insurance Premium:

You can bring down your car insurance premium to a certain extent by following these valuable tips:

  1. Preserve your No Claim Bonus - Car insurance companies offer No Claim Bonus (NCB) to drivers who do not raise any claims in a policy year. The bonus accrued this way can provide you a premium discount of up to 50% at the end of 5 claim-free years. This is a very attractive benefit and you should look to preserve the NCB by refraining from raising claims for small damages. If you are shifting insurers, you can get an NCB retention certificate and transfer the accumulated bonus to your new insurance policy.
  2. Opt for voluntary deductibles - A voluntary deductible is an amount that you agree to pay at the time of a car insurance claim. This is decided at the time of policy purchase. Opting for higher voluntary deductibles can bring down your motor insurance premium. But exercise caution while stating extremely high values as you will have to pay the promised amount at the taxing time of a claim.
  3. Install security devices - If your vehicle is installed with a security device approved by the Automotive Research Association of India (ARAI), you will receive a discount on car insurance premium. This is because such vehicles have a good security system and are hence, less prone to thefts.

Where Can You Buy Car Insurance From?

  • You can purchase car insurance policies directly from the websites of insurance companies. Most insurers offer this facility free of additional costs.
  • You can also approach third-party financial websites that offer you the benefits of easy policy comparison and purchase. The advantage of approaching such neutral websites is the fact that you will be able to tally the insurance coverage against the premium for policies offered by several insurers on one platform. The entire policy purchase journey is also effortless and you stand to benefit from the guidance of customer service representatives throughout the process.
  • Another way in which you can buy motor insurance is the offline mode. You can approach the office of the insurance company or get in touch with insurance agents for the same.
  • The car dealership from where you purchase the vehicle will have tie-ups with insurance companies. You can buy insurance through the dealership at the time of vehicle purchase.

It is advisable to buy insurance online, as you stand to benefit from various offers and discounts. Insurance companies gain from online policy sales as the distribution and processing costs are minimised to a large extent this way. They, in turn, pass on these benefits to customers in the form of premium discounts.

Points To Note When Buying Insurance:

When you are looking to purchase car insurance, there are certain things you need to keep in mind so as to receive the most optimum coverage:

  1. Value of the Vehicle - When insurance companies offer discounts on car insurance policies, they may do so at the expense of reducing the Insured Declared Value (IDV) of your vehicle. You should be cautious about this because in the event of an accident the amount you receive as claim payout will be substantially low. Hence, you should look to choose an insurance plan that offers maximum IDV, even if you are required to pay a higher premium.
  2. Policy Lapsation - In case the car insurance lapses, the insurance company will offer you a grace period of about a week. You are required to pay the complete premium within this time. In case you are unable to do so, you run the risk of driving a vehicle that is uninsured. This is an offence that is punishable by law. Letting your car insurance lapse also leads to loss of other benefits such as car insurance discounts, lower premiums, bonuses, etc. So, remember to renew your policy on time; you can also set reminders for the same.
  3. Insurer’s Business History - It is a good practise to check the claim settlement history of the insurance company you are planning to choose.
    1. Check the premium they offer for your motor insurance and the availability of essential add-on covers. The personal accident cover and roadside assistance facility are invaluable add-on covers that you can buy with your comprehensive policy.
    2. You should also check the financial standing and reputation of the insurer before making a purchase decision. You can go online and read the reviews posted by customers and also stay abreast with financial news for this purpose.
    3. One important thing to check is the availability of cashless garage facility. This is a very useful service and should be opted for as much as possible.
    4. Check the customer service offered by the insurance company. Assessing the responsiveness of the insurer to issues and queries is a very important step.
  4. Policy Documentation - It is crucial to read through your policy documentation in an exhaustive manner, as this will equip you better to face a claim scenario. Pay close attention to the exclusions in the car insurance policy, so that there are no surprises when you actually raise a claim.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

Car Insurance Reviews

Page 1 of 50 1 2 3 4 5
  • ICICI Lombard Car Insurance
    "Good Policy."
    0.5 3.0/5 "Satisfactory"
    I have bought my car insurance with ICICI Lombard for last 5 years which I'm continuing for with the same company. The claim experience was better and when i applied for the same, they have given upto 80%. Its covered with bumper to bumper facility. They have given the claim in 1 week.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 22, 2019
  • Royal Sundaram Car Insurance
    "Good policy "
    0.5 5.0/5 "Blown Away!"
    My car insurance was purchased in the year 2014 with Royal Sundaram. My dealer has recommended me about this policy. I pay the premium amount of Rs. 14000 with the coverage value of Rs. 6.27 lakhs which covered with the bumper to bumper facility.
    Was this review helpful? 0
    , ahmedabad
    Reviewed on Jan 22, 2019
  • Bajaj Allianz Car Insurance
    "Good Policy"
    0.5 3.0/5 "Satisfactory"
    I had taken this insurance policy a while back and the premium amount has been quite good and not too high. The payment method has been easy and there has not been any sort of charges, and the policy covers bumper to bumper. Their customer support has also been responsive and was helpful as well.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jan 22, 2019
  • ICICI Lombard Car Insurance
    "Its Good"
    0.5 4.0/5 "Great!"
    There was no claim experience for my Tata Tiago with ICICI Lombard. I have renewed the car policy at last june, I paid the amount around Rs. 10,600 because its around 1.5 year old vehicle. I took comprehensive plan which includes loss , damage, ICICI Lombard got tie up many showroom.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 21, 2019
  • ICICI Lombard Car Insurance
    "Best cover"
    0.5 4.0/5 "Great!"
    Very recently I took policy from Car insurance for my new Baleno car, it was done by ICICI bank, they deducted insurance fee from the loan. The loan department issued the policy copy on time. For first year its 100% coverage available its a bumper to bumper with ex showroom.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 21, 2019
  • ICICI Lombard Car Insurance
    "Good Car Insurance policy"
    0.5 4.0/5 "Great!"
    I have selected the ICICI Lombard for my car since the dealer has given me this insurance. I have been paying the premium amount of Rs. 15000. This is not covered for the bumper to bumper facility. They have given me a IDV value of Rs, 3.10 lakhs. They are providing the good garage facility all over the city.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 21, 2019
  • United India Car Insurance
    "Yet to experience the policy"
    0.5 3.0/5 "Satisfactory"
    I have applied the claim for my car recently. I have given the car into the showroom and they have asked me to inform in the insurance company. When i visited other branch they have asked me to the home branch. They have given me a sufficient IDV value. Its covered with a bumper to bumper facility.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 21, 2019
  • ICICI Lombard Car Insurance
    "Reliable Policy"
    0.5 5.0/5 "Blown Away!"
    Purchased my car insurance through ICICI Lombard and They have given me a low premium since i have taken a loan from ICICI bank. They have given me a good IDV value. This is a bumper to bumper covered policy. They have given me a road side assistance, no claim bonus benefits.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 21, 2019
  • National Insurance Car Insurance
    "Good Insurance"
    0.5 3.0/5 "Satisfactory"
    My Honda amaze car got insured with National insurance for one year of tenure period. I think my old premium amount was around Rs.30,000. I took first party comprehensive plan it covers for loss, damage, theft. The customer support is good even the IDV is good.
    Was this review helpful? 0
    , bhubaneshwar
    Reviewed on Jan 21, 2019
  • ICICI Lombard Car Insurance
    "Competitive price"
    0.5 5.0/5 "Blown Away!"
    I have taken a car insurance from ICICI Lombard and the service is really good. I spoke wtih the customer care once for the claim. The garage people taken care of the full settlement process. The premium amount is nominal. They have given me a best claim what they can offer according to their norms.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 21, 2019
  • Royal Sundaram Car Insurance
    "Economic offering and wide accessibility"
    0.5 5.0/5 "Blown Away!"
    Because it was good comparison between other companies hence i have chosen the Royal sundaram. The premium amount is reasonable. The IDV value is good. This a comprehensive policy which covers third party insurance. They have tie up with most of the garages. They have cashless facility in most of the places.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 21, 2019
  • Royal Sundaram Car Insurance
    "Average"
    0.5 3.0/5 "Satisfactory"
    I took my car insurance with Royal Sundaram. I never contacted the customer service. It is a default insurance from the showroom. The premium is high because I go for bumper to bumper offer, road side assistance, zeo dep. It is a first party insurance and no claim. The policy period is one year.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 19, 2019
  • SBI General Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    The showroom people has offered me a car insurance policy with SBI. I have made a premium amount of Rs. 22000. They have given me a coverage value of 100%. Total IDV value is 90% of the car value. I have no claim experience till now. The documentation process was done by showroom.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • National Insurance Car Insurance
    "Smart protection with National"
    0.5 4.0/5 "Great!"
    The major factor to chose National Insurance because of the premium is economic, I took the policy for 3 years the IDV value remains the same for the whole tenure. The customer support is good on time they activated the policy. I have Tata Tiago , its around four months vehicle. Its zero depreciation comprehensive plan. I taken the policy through showroom.
    Was this review helpful? 0
    , lucknow
    Reviewed on Jan 19, 2019
  • ICICI Lombard Car Insurance
    "Satisfied with the policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance is with ICICI Lombard. The customer services are good and I got the policy documents on time. The policy coverage is good and there are features of a road side assistance is there. The premium is economical too. Good overall.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jan 19, 2019
  • ICICI Lombard Car Insurance
    "Need to reduce the premium"
    0.5 3.0/5 "Satisfactory"
    I had a car insurance from ICICI LOMBARD which was offered by the showroom at the time of purchasing the vehicle. I felt the insurance premium is very high compared to others. I got a reminder call from the customer service at the time of renewal. It has zero dep for one year.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • Tata AIG Car Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    I took my car insurance from TATA AIG through online channel. They have given lesser premium with zero dep and it includes road side assistance. The customer service is very good. The policy period is one year. I have no claim experience. It is a first party insurance.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jan 19, 2019
  • Tata AIG Car Insurance
    "Satisfied policy"
    0.5 5.0/5 "Blown Away!"
    TATA AIG is the best company to take the car insurance. Since long time i have taken this insurance. The customer care people used to call me to renew the policy and they used to policy renewal letter. I will do payment through online. Several times i have claimed the policy and i have received very good response.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Jan 18, 2019
  • Universal Sompo Car Insurance
    "Excellent Service"
    0.5 5.0/5 "Blown Away!"
    I had taken this insurance policy a long time back and it has been a good insurance policy. I had been paying the premium online and the payment method has been convenient. There has been a claim made once and the claiming method has been simple.
    Was this review helpful? 0
    , navi mumbai
    Reviewed on Jan 18, 2019
  • New India Car Insurance
    "Comprehensive benefit policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance was taken from New India. I don't speak with their customer care since i don't require it. I had a claim experience which is a easy process without any tension. As per their policy, the maximum claim amount settled. Since they are providing good services i have opted this policy. They have given me a road side assistance and bumper to bumper facility.
    Was this review helpful? 0
    , chennai
    Reviewed on Jan 18, 2019
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