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Let’s face it—getting vehicle insurance in India often feels like just checking a box, not really making a smart choice. I’ve been there, just nodding at the car shop while I sign for a plan I hardly know. Sounds like you? Whether you’re in a new car or updating your old one, it’s time we really looked at what car insurance covers—and what it doesn’t. Think of it as if you’re buying term insurance online: it’s wise only if you know what you’re getting into. So, let’s get started!
1. The Basics: Why You Must Have Car Insurance in India:
The Motor Vehicles Act says you have to have third-party liability insurance.
- Third-Party Liability: Pays for damage or hurt you cause to others.
- Own Damage (OD): You can choose not to get this, but if you do, you will pay yourself for fixes to your car.
See third-party cover as your legal OK to drive; own-damage cover is your own shield for your car.
Pro-Tip: Even if your car is all paid off, go for the full cover (own damage+third party). The small extra cost is worth it for full safety.
2. Third-Party Cover- Your Legal Backup:
Having a third-party covered is the very least you need. This plan won’t pay for your car’s fixes, but it will cover:
- Property Harm: Hit a wall, gate, or bike? This type of insurance picks up the tab for the fixing or new part.
- Body Injury: Any cost of care and money paid if you hurt a person walking, riding with you, or driving another car.
Limit: The gov puts a limit on how much money you can get from third-party claims. Make sure to look at your policy for the most new limits set by IRDAI.
Pro-Tip: When you get a third-party plan, they often add in personal accident cover for the one who drives (up to ₹15 lakh). It’s at no cost, so do not skip it.
3. Own-Damage Cover: Keep Your Ride Safe:
Own-damage (OD) cover pays for fixes to your car if the crash is your fault or from other bad events:
- Crashes: Run-ins, flips, big hits.
- Theft or Harm: Malicious damage or stolen car.
- Acts of Nature: Flooding, earthquakes, cyclones.
- Man-Made Trouble: Strikes, riots.
OD cover uses your car’s Insured Declared Value (IDV)—the most cash the insurer gives if your car is a total loss. IDV drops each year, as your car’s worth goes down.
Pro-Tip: Check your IDV every year. A drop of 5-10% in premium sounds good, but a very low IDV might make it hard to buy new parts at current prices.
4. Comprehensive Coverage: All-in-One Safety:
“Comprehensive coverage” means it covers Third-Party, Self-Damage, and Personal Accident. It’s a top pick for many as it offers:
- Complete Liability: Other people’s losses + your car’s fixes.
- Medical coverage: For the driver (and passengers, sometimes) during accidents.
- 24/7 Help & Tow: Add on roadside help to skip pushing your car in the dark.
Look around—many insurance groups now offer free 24/7 help, text updates, and simple web claims.
Pro-Tip: Find plans that let you fix your car at no cost in your area. You just cover the deductible; the shop sorts the bill with the insurance company.
5. Must-Have Extras: Customize Your Cover:
Usual plans don’t cover it all. Here are good extras to think about:
a. Coverage of Zero Depreciation:
- What it does: Pays all for new parts without a cut for depreciation.
- Why you need it: Cuts down your cost by 30–40% for parts made of plastic and fibre.
b. Roadside Help:
- What it does: Anytime tow, fuel fill-up, tire swap, and battery start.
- Why you need it: Stuck at night? Quick help, no fight over tow charges.
c. Cover for Engine Protection:
- What it does: Keeps engine safe from water or lack of oil.
- Why you need it: Vital in places with lots of floods. Usual cover doesn’t pay for engine harm.
d. Cover for Return to Invoice (RTI):
- What it does: If your car gets stolen or is a total loss, this pays the full buying price (and covers the road tax and registration too).
- Why you need it: It helps you buy the same car model again, not just what it’s worth after use.
e. Cover for Key Replacement:
- What it does: Pays for new keys and locks if yours are gone or stolen.
- Why you need it: Stop big bills, between ₹5,000 to ₹10,000, for fancy car keys.
f. Covering Consumables:
- What it does: Handles costs for tiny things (like oil, coolant, nuts, bolts) used in fixes.
- Why you need it: Cuts costs by a few thousand rupees—very good when fixing many times.
Pro-Tip: Add-ons raise your premium by 15–25%, but check how their costs stack up against what you might save on a claim. Only pick what fits the age, use, and locale of your car.
6. Exclusions:
Even the top plan has its limits. Usual things not covered are:
- Drunk Driving: Any crash when you’re above the legal limit for drink—the firm won’t pay.
- Wear & Tear: Tires, brakes, clutch—fixing them is on you.
- Electrical/Mechanical Breakdown: Engine parts failing due to old age, not by a crash.
- Using the Car for Commercial Reasons: Normal car insurance won’t take care of rides like Uber or Ola.
- Driver Issues: Claims can be turned down if the driver has no license, is too young, or is not listed on the policy.
- Modifications that are Unauthorized: Spoilers, loud exhausts, bright lights- keep to the original build, or get extra cover for changes.
Pro-Tip: When you renew, ask your agent to point out any new exclusions or changes in rules since last year’s IRDAI laws.
FAQs:
1. How do regular depreciation and zero depreciation cover differ?
Depreciation means the value drop of parts—usual claims count this, giving just the lower value. Zero depreciation cover does not count the wear for many plastic and fiber parts, so you get the total cost back (minus deductible).
2. Can I get insurance for my car if another person drives it mostly?
Yes—put them on your policy as a named driver. But be careful: if a crash happens while they drive and they aren’t on the list, your claim might be turned down.
3. When should I tell my insurer about a small crash?
Tell your insurer in 24 hours of the crash, no matter how small. If you wait too long, they might not pay out for the fix.