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What is a Car insurance policy?
Car insurance, also known as motor insurance, is a contract between the insurer and the vehicle owner, where the former agrees to pay for the financial losses caused to the owner’s four wheeler per the policy terms. For this, the insured pays the insurer a periodic amount called the policy premium. It is to be noted that having a third-party car insurance is mandatory for all vehicle owners in India. Hence, not only does car insurance help ease the financial burden, it also ensures that you comply with the motor laws of India.
Key Features of Car Insurance Policy
| Categories | Key Features |
| Car Insurance Premium | Starting at Rs. 2094* |
| Third-party (TP) Liabilities | Covers third party death, injuries & property damages |
| Own Damages (OD) | Covers replacement & repair costs for own damages (offered under standalone and comprehensive policies) |
| No Claim Bonus (NCB) | Up to 50% |
| Discounts | NCB, Anti-theft, ARAI Membership, Deductibles |
| Add-on Covers | Zero depreciation, Roadside assistance, NCB protect, Engine protection, etc. You can choose from over 10 such add-ons. |
| Buying/Renewal Process | Online |
| Personal Accident Cover | Up to Rs. 15 Lakh |
| Cashless Garages/Repairs | Available |
Types of Car Insurance Policies
The three types of car insurance in India are third-party, standalone own-damage, and comprehensive car insurance. You can opt for any of these plans that fit your coverage requirements and budget.
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Third-Party Car Insurance: Third-party car insurance or liability-only insurance is a mandatory policy for all car owners in India. Third-party insurance protects you from financial losses and legal liabilities arising from damage caused to 3rd-party property or injury/death of a 3rd-party person by your insured four-wheeler.
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Comprehensive Car Insurance: Comprehensive car insurance is a type of motor insurance which covers both third-party liabilities and own damages to the insured vehicle. With a comprehensive car policy, you can secure yourself against damages from theft, fire, vandalism, and natural calamities.
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Standalone Own Damage Insurance: A standalone own-damage policy compensates for the damages caused to your four-wheeler due to accidents and other losses, including theft and fire. It does not cover damages caused to a third-party property or person.
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Zero Depreciation Car Insurance Policy: Most car insurance providers offer two variants of a comprehensive car policy. A simple one and another with the zero depreciation add-on cover, often called Zero Depreciation Policy.
Also called bumper-to-bumper insurance, a zero dep policy eliminates the cost of depreciation when settling a claim. Zero depreciation car insurance lets you get the total value of the car or (covered) damaged car parts without having to pay for their depreciation costs.
Third-party Car Insurance vs Comprehensive Car Insurance
By definition, we now know that the basic difference between the two types of insurance is that a third-party insurance policy protects you only against third-party liabilities while comprehensive insurance for your car will offer 360-degree protection.
Here is a table comparing coverage offered under third-party and comprehensive car insurance policies in India.
| Coverage Offered | Third-party (TP) Car Insurance | Comprehensive Car Insurance |
| Coverage | Covers damages caused to third-party persons or their property. | Covers TP liabilities as well as damages caused to own four-wheeler. |
| Third-party Property Damage & Bodily Injury/Death | Covered | Covered |
| Own damages | Not Covered. Covers TP liabilities only. | Own damages arising from accidents, theft, fire, calamities, etc., are covered. |
| Insurance Premium | Lower. Decided annually by IRDAI. | Higher, as it covers both third-party and own damages. |
| Legally Mandatory | Yes | No |
| Vehicle Theft | Not covered | Partial or total losses arising out of the theft of the insured 4-wheeler are covered up to its IDV. |
| Accidental Damage | Not covered | Covered |
| Availability of NCB | No | Yes |
| Availability of add-ons | Not available. | Available |