How Does Car Insurance Work in India?

Types of Car Insurance Policies

Before we get into how does car insurance work in India, let us see the two primary types of car insurance policies:

1. Third-Party Liability Insurance
   Mandated by the Motor Vehicle Act, this is the minimum legal requirement for every motorised vehicle in India. It covers all the costs related to damage caused by third parties, like injuries or property damage. However, it does not cover any damage to the insured vehicle itself. Hence, while it is legally required, it provides very limited coverage for the policyholder.
2. Own Damage coverage
   In order to provide coverage to your own vehicle, you need to opt for Own Damage coverage. Standalone Own Damage Car Insurance Plans are available only if you have a valid third-party-only plan and not otherwise.
3. Comprehensive Car Insurance
   This offers extensive coverage. It not only covers third-party damages but also the damage to your own vehicle. It covers accidents, theft, fire, natural disasters, and vandalism. Comprehensive insurance offers optional features like add-ons (zero-depreciation cover, engine protection, or roadside assistance).

Note: New vehicles are mandated to opt for a 3-year third-party car insurance plan. So, there is a special plan for new vehicles called Bundled Plan(3+1), which offers 3-year third-party coverage to the vehicle along with 1-year own damage coverage.

How Does a Car Insurance Policy Work?

Once you have chosen the type of policy, you need to compare all the available plans and choose the one that best suits your needs. By shopping smart and comparing the available options online at Jio Broking Insurance, you can find a policy that fits your budget and ensures you are adequately covered for any potential mishap.

However you must know how a car insurance policy works in India:

1. Premium Payment
   To avail of car insurance coverage, you must pay your insurer a premium. This can be done annually or per the policy’s payment terms. The premium amount is calculated based on factors like the make and model of your car, its age, the driver’s history, and the type of coverage.
2. Claim Process
   You can file a claim with your insurer if you are involved in an accident or your car is damaged. Here’s how:
   a. For Own-Damage Claims: You need to report the incident immediately. A surveyor from the insurance company will start assessing the damage. Later, the company will either reimburse the repair cost or pay directly.
   b. For Third-Party Claims: If you cause damage to another vehicle or property, the third party can file a claim against you. Your insurer will take care of the legal liabilities and damages.
   c. Cashless Network: Many insurers come with a cashless claim facility at network garages, where you don’t have to pay any upfront fee for repairs. The insurance company directly settles the bill with the garage.
   d. Deductibles: Most insurance policies in India have a deductible clause. This means the policyholder must bear a portion of the repair cost before the insurer pays. Remember that the higher your deductible, the lower your premium.
3. Add-Ons and Optional Coverage
   Car insurance companies in India offer various add-ons to tailor your coverage. Some of the most popular ones are:
   Zero Depreciation: This ensures you receive the full claim amount for your car’s parts without any deductions for depreciation.
   Engine and Gearbox Protection: This covers the engine and gearbox damages (usually excluded in standard policies).
   Roadside Assistance: This offers towing, emergency repairs, and fuel delivery services.
   Return to Invoice (RTI): In case of a total loss, the insurer will reimburse the amount equal to the original invoice value of the car rather than its current market value.

How Premiums are Calculated?

Several factors determine your car insurance premium in India. Some include:

1. Policy Inclusions and Exclusions: Your car’s Make, Model, and Age should be considered when buying car insurance. Newer cars need more coverage and, thus, will generally have higher premiums. This is because they are more expensive to repair or replace.
2. Location: Your premium might be higher if you live in an area prone to accidents, theft, or natural disasters.
3. Add-ons: Opting for add-ons offers enhanced coverage but comes with a higher premium.
4. Claim History: Having a clean driving record with fewer claims can reduce your premium.
5. NCB: If you haven’t filed any claims during the policy period, you may receive a discount on your next renewal.

Network Garages and Cashless Claims

At Jio Insurance Broking, we partner with insurance providers that offer a wide network of garages. Network garages simplify claim settlements by offering cashless repair services. Instead of paying upfront, you can settle bills directly with the garage, saving time and hassle. These authorised service centres ensure quality repairs and eliminate out-of-pocket expenses, making the claims process smoother and more convenient for policyholders.

Renewal of Car Insurance

Renewing car insurance on time ensures uninterrupted coverage, protects against financial losses, and avoids legal penalties. Stay secure on the road with timely renewals and continuous policy benefits.

Penalties for driving without insurance

Driving without valid motor insurance in India is illegal and can result in strict penalties. As per the Motor Vehicles Act, first-time offenders face a fine of ₹2,000 and/or imprisonment of up to 3 months. For repeated violations, the fine increases to ₹4,000, along with potential imprisonment.

Apart from fines, an uninsured driver bears all costs in case of accidents, including vehicle damage, third-party liabilities, and personal injury expenses. Lack of insurance can also lead to legal complications and suspension of your driving license.

Thus, having valid motor insurance ensures legal compliance and protects you from financial risks.

How to Buy Car Insurance Online?

Buying car insurance online in India has become quite a common practice due to its convenience and ease of comparison. Platforms like Jio Insurance Broking help users to compare different policies, check premiums, and buy insurance from top insurers at competitive rates. It ensures that the best plan is displayed and offers adequate coverage for natural disasters, theft, and accidents. That said, here’s how you can buy an online car insurance:

1. Understand Your Needs: First, always determine the type of coverage you need (Third-Party Liability or Comprehensive). Make sure you consider your car’s age, usage, and location.
2. Research Insurers: Compare policies from different insurers online. Look at the coverage, add-ons, and claim settlement ratios. Here, Jio Insurance Broking helps you evaluate the best option from multiple providers.
3. Select the Right Add-Ons: Depending on your needs, choose your desired add-ons like zero-depreciation, engine protection, or roadside assistance for better coverage.
4. Calculate Premiums: Use online calculators to estimate the potential premiums based on your car’s make, model, and driving history.
5. Review Terms and Conditions: Always check in with the policy’s exclusions, deductibles, and fine print. This will ensure that the coverage meets your requirements.
6. Secure Your No-Claim Bonus: If applicable, make sure your previous claims history is considered for a discount.
7. Keep Documents Ready: Make sure you have your car details (RC, PUC, and KYC documents) handy for a quick purchase process.

Wrapping Up

Summing up, car insurance in India is an important safety net that offers financial protection from unforeseen incidents. By understanding how different policies work, the coverage they offer, and factors that can influence your premium, you can make better decisions to protect your vehicle and your wallet.

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