According to the Motor Vehicles Act 1988, you need car insurance (third-party insurance) to drive on Indian roads. Driving uninsured can lead to a fine of ₹2,000 or 3 months in prison under Section 196.
So, if you own a car or plan to buy one, get an insurance policy ready before you hit the road. However, buying a car insurance policy can be challenging with so many policies available online.
Keep reading to explore its benefits and the common types, such as comprehensive car insurance, first-party car insurance and third-party car insurance.
What are the Benefits of Buying a Car Insurance Policy in India?
The top benefits of buying a car insurance policy are financial protection, total loss coverage, 24×7 emergency assistance and driving with better peace of mind. Two other benefits are mentioned below:
- No-Claim Bonus
If you are one of those car owners who is still wondering what is a no-claim bonus in car insurance? It is a reward or discount a motor insurer gives the policyholder for not making any claim in a financial year. For example, you might get a specific percentage discount on insurance premiums for making no claims.
1st claim-free year: 20% discount
2nd claim-free year: 25% discount
3rd claim-free year: 35% discount
4th claim-free year: 45% discount
5th claim-free year: 50% discount
- Network Garages
Buying motor insurance online from a reputable insurer will give you easy access to their wide network of garages where you can get your car repaired without making large upfront payments.
For example, Bajaj General Insurance has over 10,000+ cashless garages where they directly settle eligible repair bills, making the claims process smooth.
What are the Popular Car Insurance Plans?
The popular car insurance policies are comprehensive car insurance, first-party car insurance and third-party car insurance. Their common inclusions are mentioned below so you can choose the right policy for car insurance in India:
- Comprehensive Car Insurance
Comprehensive car insurance policies are popular as they cover extensive damage to the vehicle, the individual, and the third party involved in an accident. Some of its common inclusions are:
- Third-party liability for bodily injury or death
- Third-party liability for property damage
- Accidents
- Natural or man-made disasters
- Fire damage
- Theft
- In transit damage
- First-Party Car Insurance
It provides financial protection during car repair and replacement. Car owners often buy this policy with third-party insurance, as it covers damages the latter does not. It covers expenses caused by:
- Accidents
- Natural or man-made disasters
- Fire damage
- Theft
- In transit damage
- Third-Party Car Insurance
It is a basic car insurance policy every driver needs in India. It provides legal and financial protection to the third party if they get hurt or their property gets damaged by your car. Some of its common inclusions are:
- Third-party liability for property damage
- Third-party liability for bodily injury & death
However, if you are wondering what is the sum insured for third-party car insurance, it depends on your insurer. For example, Bajaj General Insurance provides compensation of up to INR 7.5 lacs for third-party liability for property damage.
What are the Common Exclusions in Most Car Insurance Policies?
Car insurance policies in India generally have some exclusions as they aim to deter illegal or reckless driving and prevent commercial use of personal cars. Some common exclusions are:
- Intentional damage to the car.
- Depreciation or wear and tear due to usage.
- Illegal activities, such as driving without a license.
- Damages caused by war or nuclear risks.
- Illegal or unauthorised vehicle modification.
- Damage to the car during racing.
Final Thoughts
Strict legal mandates in India and rising medical bills have made a car insurance policy mandatory for all car owners.
Since you now know the common benefits of a car insurance policy, the types of policies you can choose from and the common exclusions. It is time you start looking for a reliable car insurance company in India with decades of industry presence.