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This article elaborates on the car insurance details in India. It also explains about the car insurance policy providers.

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Car Insurance

Insuring your car against damages due to traffic accidents and liabilities arising thereon is termed as car insurance. This insurance also provides for accident cover of the policy holder while driving and also its passengers. It also encompasses third party liability which is injury/death of third party, damage to the property of the third party and liability to the paid driver. The car insurance, though, does not cover the below mentioned situations:
  • Normal wear and tear of vehicle
  • Mechanical and electrical breakdown
  • Damages caused to/by a driver without valid driving license
  • Loss/damage due to drunken driving, depreciation, war or nuclear risks
  • Consequential losses
  • Vehicles used for purposes other than specified
Rules governing Car Insurance: 
Today, it is mandatory to buy car insurance for all new cars whether used for personal or business purposes. Most of the insurance companies have tie-ups with the car dealers and they offer quotes along with the purchase value of the car. Some of the insurance companies also offer special discounts for the physically challenged car owners and vintage cars.
 
The car is insured at the Insurer’s Declared Value ( IDV ). IDV is a sum of the manufacturer’s listed price after deducting the depreciation as provided in the Indian Motor Tariff Schedule and the price of additional accessories installed by the policyholder.
 
What the policy provides for:
Natural Calamities: Accident, fire, lightening, self-ignition, explosion, riot and strike, earthquake, flood, cyclone, etc.
Manmade Calamities: Burglary, house breaking or theft, malicious act, terrorism or damages sustained while transit by rail, road, elevator and lift.
 
Factors that determine the Value of the policy:
  • Age of the car
As the car is depreciated every year, the insurance value of the car reduces every year. Hence provision has to be made, if the car has to be replaced in case of damage to the older car as the insurance claims will be insufficient to meet the requirements.
  • Purpose
A self driven vehicle used for personal purpose will command a lower premium than a car which is lent out on hire and used for business purposes.
  • Accidents
If the car and its driver have been in any accidents in the past, the premium commanded is higher. As the policies are renewed every year, any accidents during the year will result in a higher premium at renewal.
 
Car Insurance Claim procedure: 
The claims could arise in case of accidents, third party claims or thefts. The documents required for claiming insurance are :
  • Duly signed Claim form
  • RC copy of the car
  • Copy of the driver’s license
  • FIR copy
  • Copy of estimate
  • Copy of the insurance policy
Car Insurance providers: 
Earlier, only Public sector insurance companies used to offer the Motor Insurance e.g. UIC, NIC, TOICL, but now this sector has been witnessing a good growth because of entry of private sector insurance companies. Insurance companies like Reliance, ICICI Lombard are offering insurance at very competitive rates. A number of insurance companies are offering insurance online, where they are able to give good discounts due to no involvement of agents.
 
As of now, the motor insurance segment is a loss making sector as the premiums charged are less than the claims settled because of the number of accidents being registered. The car insurance segment is evolving and a lot of features are being introduced which will influence the premiums charged every year. 


  • sonia:
    mr.naveen claim officer refused to give claim why?
    03-Dec-2012 09:43 AM
  • Rohit Saware:
    If i crash my vehicle to other vehicle that case can i apply the the both vehicle insurance or not?
    02-Dec-2012 10:12 AM