Types of car insurance in India
With the plethora of car insurance available to the consumer in the market, it becomes confusing while shopping for it. In India, insurance companies offer different plans with different features, and these plans come at various price points.
Car Insurance is a tricky business, as most of the policy buyers aren’t aware of what needs to be done and what has to be avoided. Having a car without insurance is illegal. So you cannot drive a car in India that is not covered under a valid insurance policy.
The business for car insurance is huge and many companies are into this field like a government based as well as private firms. Some are:
Orient Insurance Company - Government
United India Insurance Company - Government
HDFC Ergo - Private
SBI - Government
ICICI - Private
TATA AIG - Private
Bajaj Alliance - Private
The New Indian Insurance - Government
Reliance General Insurance Company - Private
And many more.
Generally, we have two types of car insurance in the market:
Third-Party car insurance
comprehensive car insurance
To explain both let's consider this scenario wherein you have met with an accident and damaged other road user's vehicles or public property or injured a person.
Third-party car insurance: A third-party car insurance policy will reimburse the car that you dashed into or pay for the loss of life, disability injury or property damage. The other party will receive compensation for the damage and you can be protected from a financial catastrophe. But no aid will be provided to you or your vehicle under this scenario. Also, Third-party insurance is generally the cheapest one can opt for. This insurance protects one from the financial liability of the other beings.
Comprehensive Insurance: A comprehensive insurance not only provides the coverage of third-party insurance but it also provides protection for your own vehicle. It is the most extensive coverage that you can wish for and is highly recommended by us. Therefore, among all the different types of car insurance provided, comprehensive car insurance proves to be giving the maximum coverage.
A surveyor will be assigned to examine your damaged vehicle. The surveyor will ascertain the reason and the extent of the loss after which your insurer will send an approval/rejection of the claim. Meanwhile, you can take the car to the garage for repair or ask your insurer to do so. If your claim is approved, you will be paid or compensated for the loss.
However, insurance companies also add-ons while you shop for protecting your car and they are provided in the form of:
Road Side Assistant
Return to invoice (provided for limited years, useful if one lives in an unsafe neighborhood)
Many more such add-ons are provided as options.
Now let us assume that your car gets involved in an accident, and you suffer a huge loss due to the same. As promised by your insurance company, you are expecting to get paid for this loss. Here you need to file a ‘CLAIM’ in order to get paid by your insurer.
Types of claims:
Cashless claims: When you make a cashless claim against your car insurance policy, you do not have to worry about the repair costs. It is important that you take your car for repairs to a network garage. You just pay the deductible amount and the rest is taken care of by your insurer. The deductible is a portion of the bill that you pay from your pocket compulsorily or voluntarily.
Reimbursement claims: You need to pay for the repairs from your pocket and then submit the original bills, payment receipts, etc. to your insurer. Your insurer then subtracts the deductible amount and reimburses the repair amount to you. You can get your car repaired at your preferred garage.
In case your car is stolen, the first thing you must do is, inform your insurer and the police. You will have to submit documents such as a copy of your car’s registration certificate, your driving license, FIR from the police, etc. Some insurers also ask for the car keys. If the police cannot locate the car within a reasonable time period, it issues a non-traceable certificate. It allows your insurer to proceed towards the settlement of your claim. The insurer will then pay you the current market price of the car. If you have taken the Return to Invoice cover, then the amount will be equal to the car’s purchase value.
Documents required for the insurance claim:
A copy of the registration certificate of your Car.
Police report or FIR with a detailed update of the situation.
A copy of the insurance policy.
A copy of your license. Has to be a valid license.
Original repair bill, cash receipts (not required of cashless).
Even though you have valid insurance, your insurance claims can be rejected on the basis of the following:
The details provided by you in the application form are incorrect or false.
The vehicle was being driven by a minor.
The vehicle was driven by someone with no license/ invalid license.
The vehicle was driven under the influence of alcohol.
You own a second-hand car but the insurance still on the 1st owner/ seller.
The repair cost higher than the depreciation.
Failure to report the incident to the insurance company in the given time window.
Used a private vehicle for commercial purposes.
Illegal use for transport of socially harmful elements.
You drive the car out of service without informing the insurance company or without repairing the car completely.
Always drive cautiously and responsibly as claiming insurance impacts your premiums and reduces the value of the car. Driving is a privilege, not a right.