HomeUncategorizedCar Insurance: Types, Benefits, Importance & Documents required to Buy Insurance

Car Insurance: Types, Benefits, Importance & Documents required to Buy Insurance

What is Car Insurance?

Car insurance protects your financial interests and covers any damage to your car. If you, or your family members, are hurt in an accident or are hit by someone, car insurance can pay for the medical expenses. Your car insurance policy covers you up to a certain amount, as agreed by you and your insurance company.

Car Insurance: Highlights

Below are some highlights of a policy for insurance on four-wheelers:

Third-Party Cover

Protection for property and third-party injuries

Own Damage Insurance

This policy covers the four-wheelers for any damage or loss.

Personal Accident Cover

Available up to 15 Lakh

Addon Covers

There are many add-ons available depending on the policy, such as zero depreciation coverage, return to invoice cover, roadside assistance, and so forth.


Available at the network garages for the insurer

No Claim bonus

As high as 50%

Different types of Car Insurance

Here are Different types of car insurance coverage

1.   Liability insurance

Liability coverage covers costs related to an accident for which you are legally liable. Two types of coverage are typically included in liability insurance:

  1. Bodily Injury: This pays for the costs of injuries or deaths caused by others (e.g. another driver, their passengers, or pedestrian) if you are at fault.
  2. Property Damage: This covers expenses for the repair or replacement of other property. You cause damage to your vehicle while operating it.

Many states require that drivers have minimum liability coverage to register and drive a car in their state. The Key Features of Car Insurance Policy

2.   Uninsured Motorist Insurance

Uninsured motorist coverage offers financial protection if you are injured in an accident, and the other driver does not have car insurance. This coverage can also cover property damage depending on your location. If you are the victim in a hit-and-run, your uninsured motorist coverage will also pay.

Uninsured motorist coverage may not be available in certain states if your underinsured driver limits exceed the liability limits for the other driver.

3.   Personal Injury Protection (PIP).

This insurance, also known as “no-fault” coverage and pays for your medical bills and the expenses of your passengers in case you are hurt in an accident. If you are riding a bicycle and being hit by another vehicle, PIP might also be available. In certain cases, PIP coverage can reimburse you for lost wages or expenses for tasks that you are unable to perform while you recover.

PIP is not available in all states and it is usually optional.

4.   MedPay – Medical Payments Insurance

Like personal injury protection pays your medical bills regardless of fault. MedPay doesn’t cover additional expenses or costs like lost wages, unlike PIP. MedPay is not required in Maine or Wisconsin. Monday, which is an optional coverage that you can buy with standard car insurance policies, is only required in Maine and Wisconsin.

It is not available in every state.

5.   Collision Coverage

Collision coverage covers repairs to your car if you are damaged in an accident, or collides with another object such as a tree or building.

6.   Comprehensive Coverage

Comprehensive coverage covers damage to your vehicle that is not caused by an accident or collision with another object. Hail damage, damage by falling objects, cracked or shattered windows, vandalism, or damage from an animal are all examples of covered losses. You will also be reimbursed if your vehicle is stolen.

How Car Insurance Works in India

Car insurance is an agreement between the owner of the vehicle and the insurance company. The car owner pays premiums, and the insurance company covers any damage or loss to the vehicle. No matter if the vehicle is commercial or personal, it only requires car insurance. Many Indian insurance companies have tie-ups with car manufacturers. They offer instant quotes for car owners

What is the importance of car insurance?

Roads are one of the most dangerous places. Neglect, carelessness, or even sheer luck can have devastating consequences for you and your car.

These consequences can be very costly for car owners. Every day, cars are exposed to a variety of threats. Money is also involved in every stage that a car’s safety and recovery are completed. In today’s world, car insurance policies are essential.

Here are some reasons to get car insurance:

1.   Covers Personal Damage Expenses

Cars can also be damaged by natural disasters or technical glitches. No matter what is the reason, car repairs can be costly. It is a good idea to purchase car insurance. This covers damage arising from uncommon causes.

2.   Third-party Liabilities

A car is a machine that is susceptible to technical problems. A car that is out of control poses a danger to public property and civilians. You are responsible for any injuries caused by an accident that occurred while you were driving. Your insurance company will pay the costs if you have car insurance.

3.   Personal Accidents

Four-wheeler insurance is similar to driving with a lifeguard. You have to ensure that you have enough money to cover any damages caused by car accidents. Car insurance policies cover a permanent disability due to car accidents. This financial support is essential for families.

4.   Mandatory by Law

Motor Vehicles Act requires that car owners must have at least a third-party insurance policy. You could face criminal charges for failing to obtain insurance.

5.   Additional Benefits with Add-ons

You can add benefits like zero depreciation, consumables coverage, breakdown assistance, and conveyance benefits to your car insurance. This will make your policy even more secure.

What does Car Insurance Cover?

The following are covered by Car Insurance, depending on what type of insurance one chooses:

Prices vary depending on how much coverage they provide. You can either choose from Third-Party Car Insurance or Comprehensive Car Insurance.

A third-party policy must be purchased under Chapter 11 (sections 145-164) of the 1988 Motor Vehicles Act. To get the best car insurance, it is recommended to purchase a comprehensive policy. You can also add to your comprehensive policy to increase coverage.

1.     Third-Party Car Insurance

Third-party property damage – Any accidental damage to property owned by third parties will be covered.

Cost of treating Injuries– This will cover the cost of treating injuries to third parties caused by the insured vehicle.

Death Compensation – In the event of the death of a third party, their family will receive compensation under this policy.

Legal Liabilities – Legal liabilities that arise from an incident involving the insured vehicle will be covered by this policy.

2.     Coverage for Comprehensive Car Insurance

Comprehensive third-party coverage – A comprehensive insurance policy provides all of the coverage that a third-party policy offers. Comprehensive car insurance policies will cover damage to your car.

Personal Accident Insurance – The cost of treating injuries sustained by the owner-driver is covered.

Theft – If the car is stolen, the current Insured Declared Valu (IDV) will be paid to the insured owner.

Fire – The car will be considered a total loss.

Natural calamities: If an insured car is damaged by natural calamities like earthquakes, landslides, or rock-slide. The damage done will be paid to the owner.

Man-made calamities: If your car is damaged by man-made calamities, such as vandalism, terrorist acts, or riots, you will be compensated. The damage done will be paid to the owner.

Add-ons – With a comprehensive policy for car insurance, an owner can increase the coverage of their car insurance by purchasing add-ons. Additional coverage options are available that can be tailored to specific needs. Many insurance companies offer a variety of add-ons. These add-ons include Zero Depreciation and Roadside Assistance, Return To Invoice, NTB protection, Engine Protect Cover, and Loss Of Personal Belongings.

How to calculate your car insurance premium

Benefits of buying car insurance online

Online shopping is the best way to shop for groceries, apparel, and gadgets. The ease of shopping online has made it a popular choice. It is important to have car insurance. We all know the advantages of this type of insurance. However, purchasing car insurance used to be difficult. You had to visit several insurance companies to compare plans and make a decision. It is much easier to choose the right plan and then finalize one online than ever before.

Buying car insurance online has many benefits. For instance, it allows you to compare the plans offered by different companies so that you can make an informed decision. You can also enjoy other benefits when you buy car insurance online. These benefits are here:

Available At A Cheaper Rate –

Insurance policies can also be purchased online, just like other online purchases. It saves your money on operational costs.

  1. Paperless Process

There is often much paperwork involved in buying any type of insurance policy offline. This process can be tedious and time-consuming. The online process of purchasing policy eliminates all the tedious and confusing paperwork. You simply need to fill in the details and follow the instructions.

  1. Convenient and Time-Saving Technology

It is very easy to buy car insurance online. All you have to do is fill out the form and attach a few details. The majority of insurance websites have an easy-to-use interface that makes it easier to buy online. You would prefer to buy the policy online than wait in line at an insurance office.

  • Instant Policy

To purchase insurance offline, the documentation process can take a long time. This includes visiting the company and waiting in line to have the documents checked. Online buying makes the process faster and easier.

  • Backups of Policy Documents

You can lose or damage your insurance policies if you buy them offline. Online insurance purchases provide soft copies of these documents. Your documents will be safe and secure.

  • Simple Reviewing –

Online insurance allows you to compare all the plans available on the market. You can also read customer reviews and market rankings, as well as the goodwill of the companies.

  • Renewal Reminders

Online insurance policies automatically save your data. You don’t need to set reminders to avoid missing renewals. Reminders for renewals are sent to your email address and your registered telephone number.

There are many benefits to buying car insurance. But the best part is that you can compare different car insurer features from different insurance companies.

How to get Cashless Car Insurance Claims?

To get cashless car insurance claims, follow these steps:

  • Register the cashless claim by calling your insurance provider at its toll-free phone number, or via its website, email, or mobile app.
  • After registering the claim, the insured receives a claim registration number which can be used for future communications/references.
  • For repairs, take the vehicle to an authorized network garage of your insurance provider.
  • All required documents must be submitted to the surveyor.
  • The insurance company for car owners confirms their liability.

In the event of a cashless claim, the vehicle is only repaired at an authorized garage. The garage will pay all bills directly to the insurance company.

Documents required while submitting for Car Insurance Claim

These documents are required to submit a claim under your motor insurance in the event of an accident or damage done to your vehicle.

  1. Photocopy of driving license
  2. Copy of your signed claim form
  3. Original repair bill
  4. RC Copy of the Vehicle
  5. FIR (Only for theft, injury/damage of third-party or highway accidents).
  6. Cash receipt and proof of release

Important Factors to consider before buying car insurance plans

The premium you pay to insure your car is affected by many factors. These factors include the number of add-on coverages you have, your policy type, and the deductible. To ensure that you get the best coverage, be aware of the details in your car insurance plan. You shouldn’t be concerned about the premium that you pay, even if it is slightly higher than you would like. Consider these factors when choosing a car insurance policy/

Inadequacy of add-ons

Riders are an add-on cover that you can attach your car insurance policy to. These riders are very useful as they increase your motor’s coverage. Each rider you select will require an additional charge. The following are some of the most common types of car insurance riders:


Engine protection rider

A comprehensive car plan does not generally cover the engine of your vehicle. You cannot claim damage to your engine caused by an accident, flood, or natural calamity like an earthquake. All issues related to your car’s engine are covered by the engine protection add-on cover.


Roadside assistance

Your insurance provider will assist you if your car suddenly stops working. Your car will be taken to the nearest garage if it doesn’t fix the problem. These benefits are available when you buy the roadside assistance rider in addition to your comprehensive car plan.


Personal accident rider

If you are the policyholder and die in an accident on the road, your insurance provider will pay a benefit to your beneficiaries. This rider is essential to ensure the financial well-being of your loved ones.

Zero depreciation rider

Many people remove the most important riders from their car insurance plans to reduce the insurance premium. This is a bad practice. Although the additional premium might be an issue, the added coverage is invaluable and can prove to be very beneficial in the long term. You should think twice about removing the extra coverage to lower your car insurance premium.

Poor-after sales support

When choosing car insurance, you need to be careful. The deal does not end when you pay the premium or buy the plan. This is the beginning of your relationship with the insurer. This association can be very important, especially if you have to make claims. Good motor insurance companies have a great customer service team that is always there to help you. The claim process is easy and transparent. They provide excellent after-sales services. Even if the premium is slightly higher, you should get your motor insurance policy from this insurer. You may have poor after-sales service if you just check the premium and purchase the plan from any other insurer.’.

Higher Deductibles

The deductible is another important aspect of determining the premium for car insurance. As the policyholder, the deductible is the amount you pay when there is a claim. It is an amount that you have already decided to pay. The premium will be lower if your deductible is higher and vice versa. Choose a suitable deductible amount. Don’t make the mistake to choose a higher deductible to lower your car insurance premium. This can lead to high insurance premiums in the long term.

Inadequate coverage

The type of coverage you select will also affect the premium. The premium for a comprehensive plan will be greater than a third-party plan. It is crucial to get the best possible coverage. This is especially important if your car is new or expensive. You can opt for a basic plan if your car is older, but you should not compromise on coverage if you own a newer car. You will need to file a claim if your car is involved in an accident or damaged or stolen. A good idea is to have adequate insurance. You will pay more for repairs if you opt for a third-party policy to lower your premium. For the best coverage, make sure you get the right type of car insurance.

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