A contract between a car owner and an insurance provider known as "car insurance" or "four wheeler insurance" provides protection for four-wheelers in the event of financial losses brought on by unforeseeable occurrences like accidents and natural disasters. This agreement is typically seen as a piece of paper to be kept in the dashboard of the automobile and only removed in the event that a traffic officer ever requests your papers.
But there's more! Your four-wheeler is financially protected by this document in the event of damage or loss from an accident. No matter how cautious you are, there is a chance that you will have a car accident and incur significant repair costs.
There are several types of four-wheeler insurance, such as third-party car insurance, which guards against financial repercussions in the event that the insured car unintentionally damages a third party's vehicle or property or injures a third party or person. This liability-only or third-party auto insurance coverage does not cover harm done to the insured vehicle. According to the Motor Vehicle Act, if you wish to drive your car on the road in India, you must have a current third-party insurance policy.
A further kind of car insurance is comprehensive car insurance, which covers not only any third-party responsibility but also any monetary harm to the car that may result from mishaps, theft, fire, and natural catastrophes like lightning, storms, floods, and cyclones as well as man-made harm like vandalism and rioting. additional to that You can also purchase a Personal Accident Cover to protect yourself against severe physical harm in the event of an accident.
Depending on your needs, you can select a third party, comprehensive, or even a stand-alone damage coverage when you purchase car insurance online. With car insurance add-ons, you can extend the full car insurance coverage.
Why Is Car Insurance Necessary?
To protect you and your vehicle against a variety of circumstances and potential outcomes that could result in monetary losses, you must have car insurance or a four-wheeler coverage. You should get comprehensive or third-party four-wheeler insurance for the following reasons:
Adherence to the law
The Motor Vehicles Act mandates that all drivers carry third-party car insurance. Therefore, third party insurance is a minimum need for every vehicle operating on Indian highways. Without a valid policy, you risk getting into legal problems and facing expensive driving fines.
Protection from third-party liability
When the insured four-wheeler accidentally damages a third party's vehicle or property or injures a third party person, third-party liability is created. These third-party obligations are covered by third-party auto insurance, or even a comprehensive auto insurance policy, which shields the owner of the insured vehicle from monetary losses.
Protection from theft
Your car insurance coverage can pay for the financial losses and make up for the loss of the car or the cost of replacing or repairing the car parts if your four-wheeler or car parts are stolen. Your insurer ensures a quick and easy settlement process to give you the amount covered for your automobile in the event of a total loss (damage beyond repair) or theft of your vehicle.
Protection from monetary losses
Financial losses may result if your car has a bump or significant scratch as a result of a collision or act of vandalism. An Own Damage Cover or Comprehensive Car Insurance is helpful in this situation because they provide total protection for the covered vehicle from all types of damages, including theft, accidents, natural disaster damage, and more.
Protect yourself against natural disasters
Your car may sustain considerable damage in the event of floods, cyclones, storms, earthquakes, or other natural calamities, and the cost of repairs may be high. Your four-wheeler insurance policy's financial plan aids in taking care of these damages so that your vehicle is secure and in good shape even during severe weather.
Coverage for Personal Accidents
According to rules established by the Insurance Regulatory and Development Authority of India, a personal accident cover under a car insurance policy is available up to Rs. 15 lakhs in the event that the policyholder or the owner-driver of the vehicle sustains physical harm, becomes disabled, or passes away.
Points to Consider When Choosing Car Insurance
Choose Your Insurance Type: You have the option of choosing between a basic third-party liability protection and a comprehensive insurance cover when buying four-wheeler insurance. A comprehensive car policy offers more comprehensive coverage, offering protection against accidental damage, damages from loss and theft, natural and man-made disasters, and also offers a personal accident cover. Having a basic third-party insurance policy is required by law and only covers damages to a third-party person or property.
Check policy coverage: Your needs and financial constraints will have a major impact on the policy coverage of your car insurance policy. In addition, the brand and model of your car, where you reside, and other criteria will influence the policy coverage.
The accessibility of add-ons: You might think about extending or increasing your policy cover with the aid of suitable add-ons when you get car insurance online or renew your policy. Insurance companies provide a variety of special add-ons to cover a variety of situations that go beyond the purview of your auto insurance policy, including Key Replacement, Return to Invoice, Engine Secure, and others. Your four-wheeler can receive all-around protection from your car insurance policy if you choose the necessary add-ons.
Check the insured declared value: The car's current market worth is its IDV, or Insured Declared Value. The IDV, which represents the amount your automobile is insured for, is crucial when figuring out your auto insurance. The policyholder receives the Insured Declared Value upon settlement of the claim in the event of "total loss"—complete damage to or theft of the vehicle. Always choose the IDV carefully because, despite reduced policy premiums, a lower IDV indicates insufficient coverage in the event of a total loss. On the other hand, a larger IDV might result in higher premium costs.
Cashless Garages Network: If you need to have minor or substantial damages to your car repaired, you can go to one of the garages in your insurance company's network. By doing this, you can take advantage of cashless claims, where the insurance will pay the garage's repair costs directly, saving you from having to spend a fortune on repairs.
Compare Quotations: A calculator on the insurer's website makes it simple for you to compare several four-wheeler insurance policies online. You can select the insurance coverage amount, the add-ons, and then compare many plans to discover the best one to safeguard your vehicle based on your needs and budget.
Check the service offered, reviews, and the claim settlement ratio: When choosing your car insurance, it's crucial to take the claim settlement ratio of the insurer into account. Your chances of having your claims resolved promptly are improved if your insurer has a high claim settlement ratio. Similar to this, you should research an insurance business before purchasing a four-wheeler insurance policy from them because the service they provide has a direct impact on client loyalty.
Type of car insurance:-
Comprehensive Car Insurance
In comparison to a basic third-party four-wheeler insurance policy, the comprehensive car insurance policy provides extensive coverage. It provides protection against third-party liabilities as well as damage from accidents, car loss, natural disasters like floods, earthquakes, and cyclones, as well as man-made disasters. A complete four-wheeler insurance coverage does not, however, cover damages caused by driving while intoxicated or outside the specified driving zone.
Own Damage Car Insurance
The financial losses brought on by unintentional damage to your car are covered by an own damage motor insurance policy. These motor insurance plans just cover your vehicle. They don't offer protection for harm done to a third party, their car, or their possessions. If an accident causes damage to the insured car, which was purchased after September 2018, and a monetary loss results, only the insured car is covered by the own damage cover. This policy only applies to vehicles purchased after September 2018 and does not cover losses suffered by third parties.
Third Party Car Insurance Policy
A fundamental but legally required car insurance plan is the solo third-party coverage. It shields you from the monetary and legal obligations that result from harm your covered car causes to a third party's person or property. But any harm to the insured car is not covered by this policy.
Sl. No. | Comprehensive Insurance | Third-Party Insurance |
1. | Comprehensive car insurance is a general policy that guards you, your vehicle, a third party, or third-party property from any financial loss brought on by harm to any of the parties concerned. | An essential coverage package that guards you and your vehicle from third-party liability is third-party car insurance. |
2. | This policy offers protection for third-party responsibility, harm to your vehicle, theft, accidents, and harm from natural disasters or man-made catastrophes. | This coverage covers third-party damages including third-party bodily injury, third-party death, or third-party property damage. |
3. | It is not mandated by law. | It must be carried according to the Motor Vehicles Act of 1988. |
4. | Comprehensive vehicle insurance is more expensive than third-party car insurance due to the extent of coverage. | It is inexpensive since it only offers bare-bones coverage. |
5. | Driving under the influence of alcohol or drugs can cause damage to your car, as can driving outside of the permitted area and general wear and tear. | Third party car insurance does not cover damage to you or your vehicle. |
6. | Roadside help, no claim incentive, consumables coverage, and other options are available as add-ons. | Add-ons cannot be used to improve the insurance. |
Car Insurance Add-on Covers
You can increase the level of protection provided by your policy by adding additional benefits to your car insurance or four-wheeler insurance. To name a few are:
1. No Claim Bonus Defense - With the No Claim Bonus or NCB Protection cover, the policyholder is still eligible for the NCB discount even after making a predetermined number of auto insurance claims during the policy year. If you wish to submit a claim and safeguard your NCB discount, this add-on can be helpful. There is a cap on the total number of claims that can be filed with this add-on, though. Only comprehensive auto insurance policies are eligible for the NCB Protection.
2. Roadside Assistance - If your car breaks down in a distant area where there is no help nearby, the road-side assistance add-on offers you and your insured automobile round-the-clock breakdown support. If your car breaks down in a distant area where there is no help nearby, the road-side assistance add-on offers you and your insured automobile round-the-clock breakdown support. When contacted in an emergency, your insurance company will dispatch a crew to refuel, tow, or offer a mechanic's services.
3. Repair of Plastic and Glass Fiber Parts - With this add-on, you can have the cracked glass, broken fibre, and broken plastic repaired at the shop, file a claim for the damages, and keep your No Claim Bonus discount intact. However, your comprehensive four wheeler insurance policy only permits one repair claim per policy year.
4. Daily Allowance - The Daily Allowance add-on gives you money to cover your travel expenses if your automobile is involved in an accident and needs to be kept in the garage for a while. Depending on the reason for the insurance claim for the four-wheeler, the sum is payable for 10 to 15 days.
5. Emergency Transport and Hotel Expenses - If your automobile is involved in an accident and you are unable to reach your destination, this add-on will cover your hotel costs for the night as well as your transportation costs to return home or to the city that is closest to your goal.
6. Key Replacement - In the event that your car or keys are stolen, the key replacement add-on will pay for the expense of replacing your lost car keys.
7. Engine Secure -The engine of your car is one of the most expensive components, making the Engine Secure cover one of the more practical accessories. If you live in a flood-prone area, this add-on enables you to make a claim for the engine's repair or replacement without paying additional fees. The protection of your engine is not included in the complete four-wheeler insurance coverage. Old car engines that have experienced significant wear and tear are not effective with this addition.
8. Tyre Safe - You can pay for the replacement or repair of a damaged tyre or tube with this add-on. This add-on, however, is only able to cover financial losses in the event that an accident results in the loss or damage of the tyres and tubes.
9. Consumables Expenses - With this add-on, we will pay the price of any consumables that are lost in an accident and need to be replaced in your insured vehicle. Consumables include things like oil for the gearbox, air conditioner gas, and nut and bolts. However, this add-on is unable to pay for the expense of petrol.
10. Personal Property Loss - This add-on assists in providing coverage for the loss or destruction of personal items such as clothing, CDs, videotapes, and audiotapes in the event of an accident. The add-on does not provide coverage for the loss or destruction of items like jewelry, cash, watches, debit and credit cards, or other valuables.
11. Return to Invoice - This add-on aids in making up the cost difference between the purchase price and the compensation amount when you file a claim for the total loss of your car as a result of theft or complete damage. Additionally, if a new vehicle of the same make and model becomes available, we will pay the difference between the amount of the claim and the price of the new vehicle. Additionally, we will cover the costs of the road tax and registration fees you incurred for the vehicle.
12. Zero Depreciation - Zero depreciation or nil depreciation add-on permits you to be compensated for the deducted cost of depreciation on your car's parts when you submit a claim for damages. As a result, you will be paid the full insured amount without any depreciation deductions. However, only the first two claims that are filed are eligible for this reward. Only your own-damage or comprehensive auto insurance policies are eligible for this add-on.
Factors Affecting the Cost of Car Insurance :-
The cost of the four-wheeler insurance coverage is the primary factor considered when buying a car insurance policy. Owner-drivers compare car insurance plans based on the required premium and typically select the one that is least expensive. As a result, you must be aware of the elements influencing the premium if you want to select a car insurance plan that is affordable. Here they are:
Insured Declared Value (IDV): After depreciation, the insured declared value (IDV) represents the car's current market value. In the event that your four-wheeler is stolen or is a total loss, the IDV is the highest sum you are eligible to recover. Your IDV and your car insurance are strongly correlated, therefore a larger IDV will result in higher insurance costs.
Age of the Vehicle: The cost of a four-wheeler insurance coverage is influenced by the age of the vehicle. Newer cars have higher insurance premiums, while older cars have lower ones. Since your car loses worth every year, the insured declared value, or IDV, decreases along with the cost of your insurance.
Insurance Coverage: The price of the car insurance policy premium is determined by the kind of coverage you choose for your vehicle. Only third-party obligations would be covered by a third-party insurance policy, which would have lower rates. A comprehensive auto insurance plan will cost more since it will cover all parties – you, your vehicle, third parties, and their property. The stand-alone own damage policy, one of our other insurance products, offers a range of alternatives for coverage, which in turn offers choices for premium levels.
Add-ons: If you choose to include add-ons with your policy, your car insurance price will go up. Your premium will vary depending on the amount and types of add-ons you select and the additional coverage each add-on offers for your four-wheeler.
Engine Capacity: Your car insurance rate will depend on the engine size. The premiums for a car insurance coverage will be greater for vehicles with larger engines than for vehicles with smaller engines. The IRDAI also announces the annual third-party auto insurance premium rates based on the vehicle's engine cubic capacity.
Deductible: The term "deductible" refers to the portion of a claim that is covered by the policyholder's own funds. A larger voluntary deductible results in a lower premium because the insurer's liability is reduced as a percentage. A higher deductible, however, also means that you will be responsible for a larger amount of the claim. Therefore, make wise decisions.
Claims History: A No Claim Bonus (NCB) from the insurer is available to car owners who have not filed a claim in a certain year. With each year without a claim, NCB, a progressive discount on the renewal premium for an auto insurance policy, increases. You can receive a respectable discount of 50% on the auto insurance renewal premium if you have five years in a row with no claims.
Other Factors: The age of the policyholder, the state in which the vehicle is registered, the make, model, and variant of the vehicle, any modifications made to the vehicle, and whether the vehicle has additional security measures are some additional elements that affect the price of a car insurance plan. The price you have to pay for your auto insurance coverage may go down or up depending on these variables.