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If this is your first time getting a car or a bike, figuring out insurance stuff can seem as hard as reading an ancient scroll. Full cover? Third-party? No value drop? Calm down, you’re not by yourself! Getting to know the kinds of car insurance is important to keep your new ride (and your cash) safe. Are you looking into bike insurance or checking out car insurance online? This blog will break it down easily. Let’s face it, no one wants to deal with insurance pain when you’re already dealing with bad traffic and trying to park right. Let’s go over the top 5 kinds of car insurance so you can shop with sureness, not mix-ups. Get ready—clear insurance info is coming your way!
1. Third-Party Liability Insurance:
What It Protects:
It is the simplest type – the bare least the law wants under the Motor Vehicles Act, 1988. This insurance helps pay if you hurt other people’s stuff or them:
- Harm to other things (other cars, walls, storefronts)
- Hurt or death of other people
It does not look after:
- Harm to your own car
- Fire, stealing, or acts of nature
Why First-Timers Often Choose This:
- Has the lowest cost among all plans
- Meets legal needs to stop fines or losing your license
But take care: if you cause a crash, you pay for your car’s fixes.
Pro-Tip: If your car is old (over six years) and not worth much, a Third-Party plan could save you money. Just add a Zero-Depreciation cover to the plan for a little more. It helps cover parts you really value.
2. Third-Party, Fire & Theft (TPFT):
What It Protects:
This adds two main forms of safety to TP:
- Fire harm from short-circuits, engine fires, or outside risks
- Theft or break-in of your car
You still have to deal with crash harm by yourself, but your quick getaways and engine troubles get some help.
Great For:
- People with mid-level cars who worry more about theft or fire than crashes
- Drivers on a budget who look for more than just the basic
Watch Out:
- No pay for crash fixes
- Too many claims can cut your No Claim Bonus (NCB), making later costs higher
Pro-Tip: Match TPFT with a Roadside Help extra—often less than ₹500/yr—for help like towing, gas fill-up, and small fixes if your car breaks down on the road. It’s a tiny price for a lot of calm.
3. Comprehensive Car Insurance:
What it has:
The best car guard you can ask for: Full plans have all of TPFT and more.
- Car harm from crashes (one car or many)
- Bad weather hits (like floods, earthquakes, cyclones)
- Bad acts and big fights
And, you can pick more items like Engine Protect, Zero-Dep, and Consumable Cover.
Why People Like it Best:
- Total safe cover from almost every risk
- Raise claim caps for big fixes
- Feel good—knowing storms, theft, and small hits are all handled
Costs & No Claim Bonus Effect:
- Rates are 30–50% more than TPFT.
- Making a claim can cut your No Claim Bonus, but some insurance groups give NCB safety extras.
Pro-Tip: Check the Insured Declared Value (IDV) well. A low IDV cuts costs now, but pays less if your car is stolen or lost. Try for an IDV close to 5% of your car’s worth.
4. Own-Damage (OD) Insurance:
What It Does:
Some firms let you get Own-Damage insurance apart from TP. This gives you help for accidents, fire, theft, and acts of nature, but not for harm to other cars or people. It’s not often seen in India, but it may cost less if you already have TP through other ways (like your work fleet cover).
When to Pick OD Alone:
- If you use cars owned by the state or a firm with its own TP set-up
- For old or rare cars under club plans with fixed TP
Cons:
- You have to get TP cover on your own to stay within the law.
- The administrative headache of overseeing two policies
Pro-Tip: If you want OD by itself, check car insurance sites that let you mix TP from one place and OD from another in a single buy—it cuts down on time and might save you money.
5. Insurance that’s Usage-Based (UBI):
What It’s For:
UBI, also called pay-as-you-drive, tracks how you drive using a device or an app. It looks at speed, how fast you go, how hard you stop, and how far. Drive well, and get lower prices.
Pros & Cons:
Pro: You might pay less if you drive safely and not much.
Con: The insurance firm knows all your trips, bad for privacy. If you drive hard, you could pay more.
Good For:
- People who drive a bit.
- Drivers who can change how they drive (easy stops, no fast driving).
Pro-Tip: Try a UBI test run first. Many insurance companies let you try a short three-month plan to check your driving. See how much you save—see if it’s worth it.
Personalising Your Policy with Extras:
The five main kinds lay out the basic cover, but add-ons can shape your plan to fit your true needs. Some well-liked added bits are:
- Zero Depreciation: No depreciation in value on parts swapped out.
- Engine Protection: Helps if your engine fails and it’s not from a crash.
- Consumables Cover: Takes care of things like nuts, bolts, brake oil, and more.
- Road Help: Help all day, every day if your car breaks.
- Legal Responsibilities to Passengers: Payout is more if they get hurt.
Pro-Tip: Extras often make costs go up by 10-20%. Only choose what you need. For example, don’t get Extra Parts Cover if your service plan covers these parts.
FAQs:
1. What’s the least car insurance you need by law in India?
You must have Third-Party Liability Insurance as stated by the Motor Vehicles Act, 1988. It pays for harm and damage you give to others, but not to your own car.
2. Can I change my car insurance plan before the time to renew?
Yes, during the time to renew, you can look at new insurance options and move your current No Claim Bonus. You keep all benefits if there is no break in coverage.
3. How does zero depreciation coverage change what I pay?
Zero Dep extras make your payment go up by about 10–15%, but they cut out the depreciation deduction on parts, which often saves you more cash when fixing.