Yes. According to prevalent motor vehicles laws in India, every vehicle plying on Indian roads must be insured.
Q. Is it possible to purchase car insurance online?
Yes. Infact, the option to buy car insurance online is often highlighted by most compliant insurers as a surefire means to stay covered 24×7 and never run out of the applicable coverage.
Q. How do insurers calculate the applicable car insurance premiums?
When deciding upon the applicable premium amount, many factors are at play. Different companies charge different rates, based on differing criterias, when it comes to own damage cover. Also, deductibles and the IDV factor play a part when the premium amounts are decided upon. Shop around, and find a policy that best matches your requirements- ideally, avoiding a scenario wherein the premium might be less but the deductibles are high and the coverage and IDV are low.
Q. What is ‘No Claim Bonus’?
No Claim Bonus, or NCB in car insurance is the benefit awarded to the insured for not making any claims during the previous policy period. Currently, this bonus ranges from 20% on the Own Damage premium upto a maximum of 50%. Note that this doesn’t apply on liability premium.
Q. Is service tax applicable on the premium payments?
Yes. The applicable service tax is in line with the regulations set by the Insurance Regulatory and Development Authority of India (IRDA).
Q. What documents must always be available in the vehicle for ready inspection?
- Copy of the Driving Licence of the individual driving the vehicle.
- Insurance Certificate.
- Copy of the vehicle’s Registration Certificate.
- ‘Pollution Under Control’ Certificate.
Q. What must I do if I lose my insurance policy?
etting a duplicate copy of your insurance policy is very easy. You could either approach your insurer’s office for the same or, if you have procured the car insurance online, print-out the soft-copy of the policy that was forwarded to you.
Q. What is IDV?
The Insured’s Declared Value (IDV) refers to the current market value of your vehicle as fixed by your car insurance company. The IDV comes in handy when claims are raised in cases of theft or total loss of the vehicle. Your insurer arrives at your vehicle’s IDV by pitting the manufacturer’s listed selling price against the commonly adhered to depreciation percentage.
Q. What is Zero Depreciation Cover?
Commonly offered as an Add-On, the Zero Depreciation Cover offers full settlement on your claim without the usual deduction affected for depreciation (or periodic reduction in value of the vehicle/automotive parts due to natural wear and tear caused due to normal usage). Deduction due to depreciation is a common factor with the normal car insurance.
Q. Why car insurance premiums differ from company to company?
Car insurance premium rates differ from one company to another based on their own internal protocols. The company calculates your premium based on these factors- a) The risk posed by you to the insurer, b) the insurer’s operational costs, c) the estimated money that the insurer is likely to pay as settlement through the year.
Q. What are the factors to consider before buying a car insurance policy?
- Brand and track record of the insurer.
- Coverage and the fine print.
- Customer service- both offline and online.
- Customization, perks and discounts.
- The clincher- Price!!
Q. How to calculate car insurance premiums?
The simplest way to calculate your car insurance premiums is with a good Car Insurance Premium Calculator. While most lending banks offer this facility on their websites, competent third party calculators are also readily available.
Q. What is covered under third party motor insurance?
Third party motor insurance doesn’t cover you and your vehicle. Its major purpose is to protect you against any liability that could arise from your vehicle’s involvement in an accident that led to the loss, damage, injury or death of third party property or individuals. Summing up, the following is covered-
- Damage to third party property.
- Injury or death of a third party (individual(s)).
- Accidental death and/or permanent total disability of the insured vehicle’s owner/driver.
Q. I have shifted to a new place. Is it necessary to update my registration address on my car insurance? How do I do it?
Of course it is necessary to update your change of address at RTO as well as inform your motor insurer. You can get in touch with your insurance provider via their toll free number, email or in person. You can do this online as well. Just go to the official website and enter the details in the required columns.
Q. How do I go about transferring my car insurance from one firm to another?
After informing your current car insurance provider, please submit the documents mentioned below.
- Transfer of Policy (Sale of Vehicle)
- New RC duplicate copy /form 29-30
- Old policy document
- NOC from the last insured
- Transfer Charge – INR 50
- Duly filled new application form, collected from the company.
Q. I am eligible for a No Claims Bonus (NCB). But I earned it when I went abroad. Can I still avail it?
Being a safe driver, you certainly deserve a reward. But when it comes to earning it abroad, there are some slight variations to the eligibility. An insurance user can be granted a No Claims Bonus (NCB) on a new car insurance plan taken out in india as per the eligibility earned overseas. But this is applicable only if the scheme is taken out in india within three years of expiration of the international car insurance plan, depending on applicable provisions of NCB as per these rules and regulations.
Q. Can I get medical cover for bodily harm or demise of the passenger(s) commuted in my car? Should I buy separate cover for that?
This is exactly why third party cover is mandatory for all car owners. Car insurance is there to safeguard you when the unforeseen occurs. But when your own actions on the road cause a mishap, this cover becomes even more crucial. And yes, medical expenses are also covered in the third party car insurance, mandatory for all car owners.
Q. My car insurance policy application was rejected. What do I do?
There are several insurance providers in India. You can compare various insurance policies online and apply for an insurance policy from a different provider. Third-party insurance plans are mandate for all vehicles in India. Therefore, you can purchase a third-party insurance and not have to worry about rejection.
Q. How does car insurance excess work?
When you make an insurance claim, you will have to pay certain amount of money called the excess if the accident was caused by you. You will have a compulsory excess and a voluntary excess that will combined together to form your car insurance excess. Compulsory excess is the amount you have to pay when making a claim and voluntary excess is the amount you volunteer to pay towards the repair costs.
Q. How is car insurance cost calculated in India?
The IDV and NCB is taken into account while calculating car insurance costs in India along with other discounts and offers.
Q. Do car insurance premiums increase after an accident claim?
Yes, your car insurance premium is bound to rise after an accident claim. Even a single auto insurance claim will result in an increase in your premium for the following year.
Q. How does car insurance payments work?
You have to pay a premium to keep your policy active. The company will send you a bill with due date and amount. You will be charged a service fee for the bill. You can go paperless to avoid the service charge. If you can’t make full premium payments then you can opt for monthly, quarterly or semi-annual payment modes. Some companies offer grace period to pay your premium. If the premium is not paid within the grace period then your policy will lapse.
Q. How are car insurance claims paid?
An insurance adjuster will assess the damage of your car and estimate of the repairs will be submitted to the insurance company. In the case of a cashless garage, the company will pay the garage directly. Otherwise, the claim settlement amount will be mailed to you in the form of a cheque.
Q. How are car insurance rates calculated?
Car insurance rates are determined based on data such as your age, gender, marital status, driving experience, driving history, geographical location, claims, mileage, and credit score.
Q. How does car insurance work after an accident?
If you aren’t seriously injured, make note of the details of the accident. Seek medical help in the case of physical injuries to your body, co-passenger or third-party. File a police report. Contact your insurance provider, register a claim online or at the branch with a duly-filled claim form and the necessary documents to support your claim. The company will send an insurance adjuster to assess the damage and come up with an estimate of the repairs. After which, the company will follow up with the claim settlement which includes the excess you have to pay. The claim amount will be sent to you in the form of a cheque or paid to the garage directly in the case of cashless garage facility.
Q. How do car insurance companies make money?
Insurance companies make money via strategic investment and risk management. The premiums paid by the policyholders are invested by the company in equity and money market instruments. Not every policyholder makes a claim, therefore it is a profit for the company if it doesn’t have to settle any claims.
Q. How to make car insurance claims?
Contact your insurance provider, register a claim online or at the branch with a duly-filled claim form and necessary documents to support your claim. The company will follow up with the claim settlement which includes the excess you have to pay to obtain the claim.
Q. How do car insurance deductibles work?
Deductibles is the amount of money you agree to pay in the case of a loss or damage. For example: If your proposed deductibles is Rs.5,000 and the cost of repairs is Rs.8,000. You will have to pay Rs.5,000 and the insurance company will pay the remaining Rs.3,000. Higher the deductibles, lower the premium.
Q. Are car insurance premiums going up?
The IRDAI has proposed up to 50% hike in premium rates for car insurance from April 1st, 2017.
Q. Are car insurance claims public record?
our new insurance provider can obtain your insurance claim records from your previous insurance provider.
Q. Are car insurance claims taxable?
As per Income Tax Act, 1961, car insurance claims are not taxable if the claim amount is obtained for damages caused due to riot, theft, floods, earthquakes, accidental fire or road accidents.
Q. Are car insurance payments tax deductible?
Only if the car is used for business purpose will the car insurance premiums paid by you be tax deductible.
Q. Where do I get car insurance quotes?
Car insurance quotes can be obtained online through the insurance company website.
Q. Where to check car insurance policies?
You can check and compare car insurance policies on third-party websites like bankbazaar.com or the official websites of the insurance companies.
Q. Where is car insurance mandatory?
As per the Motor Vehicle Act, 1988, a third-party insurance is mandatory for all running vehicles on Indian roads.
Q. What is an accident forgiveness option?
After an at-fault accident, the accident forgiveness option ensures there is no increase in your insurance rate.
Q. Which car insurance companies are the best?
ICICI Lombard, Bajaj Allianz, Reliance Car Insurance and Bharti AXA are some of the top car insurance providers in India.
Q. When does a car insurance policy expire?
If your car insurance premium is not paid within the due date or provided grace period then your insurance policy will lapse. It’s advisable to renew your car insurance policy by making premium payments on time every year.
Q. Why do car insurance premiums increase every year?
Car insurance costs rises every year depending on the company costs in policy distribution, loss in investment, fuel prices, etc. Your insurance premium can go up depending on the age and value of your car, your driving history, and the claims made.
Q. What is the PUC Certificate validity for new cars in India?
For old cars, i.e., the ones that were bought on or before 31 March 2010, the Pollution Under Control (PUC) Certificate should be renewed on a quarterly basis. The validity of the PUC Certificate for new cars is 1 year. Vehicles that were bought on or after 1 April 2010 are considered to be new cars under this classification.
Q. How many times can car insurance be claimed in a year?
As long as a car insurance policy is in force, there is no restriction on the number of claims that can be raised in a year. However, the number of claims allowed under add-on covers like NCB protect, zero depreciation, etc. are limited. You can find more details on these limits in the policy documentation.
Q. What is the difference between salvage loss and total loss?
Total loss: When an insured vehicle is totally damaged, or destroyed to an extent where it cannot be repaired or recovered for further usage, it is said to be a total loss. Salvage loss: As indicated above, when a vehicle is severely damaged, or totalled beyond repair, it is declared as a ‘total loss’ by the insurance company. Under such circumstances, the vehicle cannot be driven on public roads. However, if the vehicle is restored or rebuilt again and made roadworthy, it will be allowed to be driven again and will bear the tag of ‘restored vehicle’, ‘rebuilt vehicle’, or ‘reconstructed vehicle’. The rebuilt vehicle will also get a salvage loss tag.
Q. What is a certificate of insurance?
A certificate of insurance (COI) is the document issued by your insurance provider when you buy an insurance policy from them, or renew an insurance policy with them. The certificate of insurance is a token of proof for your insurance purchase. The certificate is furnished with all the details related to the insurance policy such as, the type of insurance, the coverage provided by it, name of the insurer, policy number, tenure of insurance, and name of the insured.
Q. Is the insurance premium dependent on my city of residence?
Yes, the city you are residing in will have a direct effect on the premium that you pay. Rural areas are less likely to have accidents as the traffic congestion is less. Hence, the rates of premiums are less if your car is registered in a rural area. Urban areas with a high population are usually more congested and thus the rates of accidents are higher. Since, insurance companies ascertain the premium rates based on the risk involved, the rates will be higher in urban areas or metro cities than rural areas. Another factor on which the insurance rates are dependent is the area in particular. Your insurer can figure out the amount of thefts and accidents in the area where your vehicle is registered using your PIN code. Areas with more thefts, vandalism issues, accidents, etc. will have a higher rate of premium.
Q. What is meant by policy term in car insurance?
Period of policy/policy term is the tenure for which an insurance policy is valid or active. During this tenure, your car will be covered under the policy. The starting date is basically the date of inception of the policy and is usually valid for a year. The policy will be valid till the ending date and has to be renewed once the coverage tenure is over.
Q. I have purchased a used car. Can the insurance of the previous owner continue while the car ownership has been transferred to my name?
No, it is not possible to continue a car insurance in the name of the previous owner even after the ownership is changed to your name. It is mandatory to have the same address furnished for the registration and insurance of the car, in order to make a claim. It is important to change the name and address to enjoy the benefits of the insurance policy.
Q. What are the disadvantages of not buying car insurance?
The following points can be quoted as the disadvantages of not having a valid insurance policy for your car:
Invite penalties: Having a valid insurance policy for your vehicle is compulsory as per the Motor Vehicles Act, 1988. If you are driving without insurance, be prepared to pay a hefty fine for breaking the law.
Pay third-party losses: Having car insurance ensures that the losses incurred by a third party on their property will be covered under the policy. The insurance company will cover the expenses that are to be borne by the policyholder. In case you do not have an insurance policy, you have to pay off the expenses from your own pocket.
Pay for own losses: If your car was involved in an accident, there are high chances that your vehicle has undergone certain losses. No matter how small or big the loss is, you have to bear the expenses for the repairs if you don’t have car insurance. These expenses are covered under a comprehensive insurance plan otherwise.
Legal complications: If your car does not have an active insurance plan, you might be penalised heavily and might also be imprisoned for not having an active policy. This is in addition to the financial loss that you have to bear to repair your vehicle.
Loss of No Claim Bonus: If you had an insurance plan for your vehicle earlier and you decided not to renew it, you will be losing the No Claim Bonus (NCB) that might have accumulated in the past policy tenure.
Q. My car insurance application was rejected. What should I do now?
If your car insurance application has been rejected, you should look for another insurance provider immediately. There are a number of public and private sector insurance companies in India and most of them offers car insurance as a product. The best thing to do would be to approach another insurer and get a quotation for your vehicle insurance policy. Remember to check for quotes online through a third-party website and compare between all the options there. Using this method, you might end up getting a better deal altogether.
Q. My car insurance policy has expired. Will my NCB be retained?
Yes, you are eligible to retain the accumulated NCB or No Claim Bonus. If the insurance policy is renewed within 90 days of its expiry, the NCB can be availed. You will lose the NCB if you renew the policy after the 90-day period.
Q. What document should I submit to avail my No Claim Bonus?
If you are renewing your insurance policy with your current insurer, you do not need a proof. Your insurance company will have a complete record of the claims that you have made and the NCB accrued. You would need a proof of no claims only if you are renewing your insurance with a different insurance provider. In this case, you can ask your previous insurer to issue a letter confirming the No Claim Bonus accumulation.
Q. What type of insurance do I need if my vehicle has an additional CNG/LPG kit?
If your car has an additional CNG/LPG kit it has to be insured separately. You have to declare the additional fittings at the time of making the insurance policy proposal.
Q. Are there any special discounts on motor insurance for people with disabilities?
Yes, some insurance companies offer discounts up to 50% for people with physical disabilities provided that the vehicle is designed or modified for the use of the physically disabled.
Q. Does car insurance provides for the cost of ambulance ride?
An insurance company covers the cost of ambulance as part of the medical expenses after a car accident. The cost for an ambulance ride is covered if it is medically necessary.
Q. What is ARAI?
ounded in 1966 and headquartered in Pune, the Automotive Research Association of India (ARAI) plays an important role in laying down rules and regulations for bringing more efficient, safe, and less polluting vehicles on the Indian roads. It conducts testing, research and development, homologation, and frames the rules and regulations pertaining to vehicles manufactured for India. It uses state-of-the-art technologies and qualified human resources to meet its objectives.
