Car insurance is always necessary so that your car is well-protected against harm and you are protected against the financial damages. Having car insurance is not only important from the safety point of view but also because of the traffic laws in our country. It also ensures peace of mind, so that in case of an unfortunate accident, you do not have to worry about the expenses of repairing your car.
Car Insurance in India
If you want to avail car insurance in India, then these are two types that you can choose from:
- Third-party: A third-party car insurance policy is a compulsory requirement for all car owners and covers only third-party liabilities, including damages/injuries to a third-party car, property or person.
- Comprehensive: A comprehensive car insurance policy covers the accidental damage as well as the theft of the car and own damage to the driver-owner, along with third-party liability.
What is third-party car insurance?
As per the Motor Vehicles Act, 1988, a valid third-party insurance policy is a mandatory insurance cover that every car owner in India must possess. While this insurance only protects the third-party property or person against damages, you are protected against the legal liability caused by your insured vehicle.
It means that in case of an accident or mishap where the third-party suffers damage from your vehicle, you can compensate for it without having to dip into your savings. Your third-party car insurance covers for these damages so that you need not worry about paying for someone else’s damage. Hence, it is also known as the third-party liability cover or simply, a liability coverage.
What are the features of third-party car insurance?
Having a third-party car insurance policy can be useful in the following ways:
- Being a legally mandated cover and offering basic coverage, a third-party policy is extremely affordable.
- You need not struggle at least with your finances if your vehicle accidentally damages a third-party vehicle or causes bodily harm to a person.
- If the third-party wants to be reimbursed for damage to their car and move the court for the same, the legal liability is covered by this type of insurance.
- If your vehicle is old and you intend to sell it off/give it away soon, you can just have a basic third-party insurance plan for the time being.
What are the merits and demerits of third-party car insurance?
Though third-party car insurance is compulsory in India, here are a few of its merits and demerits:
- Obligatory – To drive on Indian roads, you must obtain third-party insurance for car. It is mandatory for all car owners to have this type of insurance.
- Eases financial burden: Accidents can disrupt the car owner emotionally while putting a strain on the finances. Basic third-party insurance takes care of any liabilities related to third-party damages and provides some relief.
- Premium is affordable – The third-party insurance is a basic necessity. Hence the premium is quite affordable. The IRDA reviews and fixes the premium for vehicles every fiscal year.
Demerits of a third-party car insurance
- Third-party Insurance provides only a basic coverage against the financial liabilities arising from damage caused to a third-party by the insured vehicle.
- It does not cover any liabilities arising out of theft, loss or damage to the insured car. This will have to be either borne by the policyholder or a comprehensive insurance plan.
How is third party car insurance premium calculated?
In India, the rates for third-party car insurance is calculated by the Insurance Regulatory Authority of India (IRDAI). Each year, this amount is revised and is calculated on the basis of the engine or cubic capacity (cc) of the insured car and the earning capacity of the policyholder.
While the rates are subject to revision every year, the IRDAI has decided to keep them on hold for the year 2020-2021 due to the financial burden caused to car owners by the coronavirus pandemic. Below are the existing rates for third-party car insurance premium as declared by the IRDAI for 2019-2020:
|Not exceeding 1000cc||₹2072|
|Exceeding 1000cc but not exceeding 1500cc||₹3221|
Why should you buy car insurance online?
Buying car insurance online has its own benefits. Let’s see the following perks of buying car insurance online.
- It is easy to compare car insurance quotes of different companies online. With an online premium calculator, you can compare and choose the most suitable car insurance cover for your vehicle.
The online purchase of car insurance means that you can buy it anytime and also from the comfort of your home. It saves the time consumed by commute and delays. You can also browse through the various comprehensive insurance plans offered.
- All the information you need for research is available on the insurance provider’s website. Starting from the insurance plans to the offer documents and other processes, you can gather all the information from a single spot.
- Buying car insurance online means that you can also save a soft copy of the insurance documents with you. If you save them on your phone, then you need not carry the papers around while travelling. Accessing them on a mobile device is quick, safe and convenient!
- Insurance providers also offer certain discounts if you buy a car insurance policy online. This is because they also save on the overhead costs and the time that is otherwise consumed by an offline policy. Additionally, offering a discount also encourages more customers to buy their insurance online.
How to buy car insurance online?
You can follow the steps below to buy car insurance online:
- Compare and check the quotes from different insurance providers using an online premium calculator.
- Next, choose a suitable insurance provider and visit their website to choose from their car insurance plans. Each provider offers different types of car insurance coverage that can be suitable for you.
- Once you select a plan, you can fill in your personal details as well as your car’s details. You will have to provide the car’s registration number, proof of address and identity proof.
- While selecting a car insurance policy, you can also add some important add-ons like engine protection and roadside assistance that can help you build a more beneficial car insurance plan.
- Also, do not forget to go through all the offer documents of the insurance provider on the website. These will also mention what the insurance policy does not cover. At this point, you can choose not to proceed with the insurance policy and instead, choose another one, depending on the coverage.
- Lastly, avail an easy checkout when you finalise the insurance policy and make your payment online. It is quick and hassle-free!
Renewing your car insurance policy online
If you wish to renew your car insurance policy, you can follow the above steps on your insurance provider’s website. Always remember to renew your policy at least a couple of weeks before it expires. By doing so, you will be able to carry your No Claim Bonus benefits accumulated from your existing policy to the new one.
Having a car insurance policy is always important, and you must never drive your vehicle without the protection of one. By purchasing it online, you co an save a lot of time, some money and contribute to a greener environment due to less use of paper!