Key Highlights

  • Third-party insurance is mandatory for cars in India.
  • Compare coverage, IDV, deductibles and exclusions instead of looking only at the premium.
  • Check whether comprehensive or own-damage cover suits your car.
  • Choose add-ons based on your car’s age, usage and risks.
  • Understand NCB before buying or renewing a policy.Check the claim process plus cashless garage network.
  • Renew your policy on time to avoid a lapse.

Buying car insurance is not simply about finding the lowest premium. Two policies with similar prices can offer different coverage, IDVs, deductibles, and add-ons. A policy that looks cheaper at first can also leave you with higher expenses during a claim. 

Before buying car insurance, take some time to compare what each policy actually offers. The right choice should provide suitable protection for your car without adding benefits you are unlikely to use.

This blog discusses the following points that you can consider before buying your car insurance. 

1. Check Types of Car Insurance

Start by understanding the type of insurance you are buying.

Third-party insurance is mandatory for cars in India. It covers your legal liability towards a third party if your vehicle causes injury, death, or property damage, subject to applicable terms.

It does not cover damage to your own car.

You can consider broader protection through:

2. Compare Policies

Premium is an important factor, but not the only one to compare. You should look at:

  • Coverage
  • IDV
  • Deductibles
  • Exclusions
  • Add-ons
  • Claim process
  • Cashless garage network

3. Check the Insured Declared Value

The Insured Declared Value (IDV) reflects the vehicle’s current market value after considering depreciation.

A very low IDV can affect the amount payable for an eligible claim. Therefore, do not choose a policy simply because it offers a lower premium. Check whether the IDV is reasonable for your vehicle before purchasing the policy.

4. Understand the Deductible

A deductible is the amount you have to bear yourself when making an eligible car insurance claim. A policy can include a compulsory deductible. You can also choose a voluntary deductible in some cases.

A higher voluntary deductible can reduce your premium. However, it also increases the amount you pay from your own pocket during a claim.

5. Choose Add-ons Based on Your Needs

Add-ons provide additional protection beyond the basic policy. Common options include:

  • Zero depreciation
  • Return to invoice
  • No Claim Bonus protection

However, more add-ons do not automatically mean better insurance.

Before selecting one, check:

  • What it covers
  • Its limits
  • Its exclusions
  • Additional premium
  • Whether it suits your car

For example, zero depreciation can be useful for a newer car where repair costs can be high. The needs of an older car can be different.

6. Understand the No Claim Bonus

The No Claim Bonus (NCB) rewards you for completing claim-free policy periods. NCB does not apply to the third-party portion of the premium. You should check your NCB details before renewing your policy.

7. Check the Claim Process and Cashless Garages

The value of insurance becomes clearer when you need to make a claim.

Before buying a policy, check:

  • How claims are reported
  • Documents required
  • Claim support
  • Cashless garage network
  • Applicable deductibles
  • Important claim conditions

A good cashless garage network can make repairs more convenient. This is particularly useful if you want to get your car repaired at a network workshop.

8. Read Exclusions Carefully

Insurance does not cover every type of damage or situation.

Exclusions explain circumstances that are not covered under the policy. These can vary between policies.

Before buying, check the:

  • Major exclusions
  • Coverage limits
  • Deductibles
  • Claim conditions
  • Add-on exclusions

9. Avoid a Policy Lapse

Renew your car insurance before the expiry date.

Motor insurance does not have a grace period for premium payment. Even a one-day lapse can result in vehicle inspection requirements before renewal. Set a renewal reminder so you do not miss the due date.

10. Verify Your Policy Details

Check all the details before making the final payment.

Pay attention to:

  • Registration number
  • Car make and model
  • Variant
  • Fuel type
  • Previous policy details
  • NCB
  • IDV
  • Policy period

The information should match your vehicle documents. After purchasing the policy, keep a copy of the policy schedule accessible for future reference.

Conclusion

You should compare the coverage, IDV, deductibles, exclusions, add-ons, and NCB before making a decision. Also check the claim process and cashless garage network.

Most importantly, choose protection based on your car’s age, usage, and likely risks. A few minutes spent comparing these details can help you avoid unnecessary costs while ensuring that your policy provides useful protection when you need it most.

FAQs

1. Is third-party car insurance mandatory in India?

Yes, third-party insurance is mandatory for cars driven on Indian roads.

2. Should I choose comprehensive car insurance?

Comprehensive insurance can be useful if you want protection for your own car along with third-party cover. The right choice depends on your car, usage and risks.

3. What is IDV in car insurance?

IDV is the insured value of your car for own-damage cover. It broadly represents the car’s current market value after depreciation.

4. What is No Claim Bonus in car insurance?

NCB is a discount on the own-damage premium for claim-free policy periods. It can increase from 20% up to 50% based on successive claim-free years.

5. What happens if my car insurance expires?

A lapsed policy can lead to inspection requirements before renewal. You can also lose your accumulated NCB if the comprehensive policy remains lapsed for more than 90 days.

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