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Types of Car/Auto Insurance in India

31 August, 2016

In India, buying a new car calls for a celebration in the house and the vehicle is welcomed into the family as a house member. And just the way we take care of our family members, it is advisable to protect your car against harm with an insurance policy. 


Let us try and understand the different types of car/auto insurance offered in India: 


Third-Party Insurance


It is a type of car insurance plan that offers limited coverage. As the name suggests, it offers protection against damages or injuries to third party person or property. 


Third-party insurance does not cover for the damages that are inflicted upon the owner or insured vehicle.


The Indian Legal System has made it mandatory for all car owners to have at least a Third-Party Insurance coverage.

Benefits of Third-Party Insurance


  • Provides legal cover and financial assistance during times of sudden unfortunate events such as accidents. 
  • Ensures peace of mind while dealing with traumatic situations. 
  • Cost-effective and beneficial in terms of premiums.
  • Renewal can be done easily online.
  • Offers financial support to third-party who is involved in the accident. 


Comprehensive Insurance


This is a type of car insurance plan that provides the minimum required coverage of losses related to third-party. It also offers protection from losses or damages to the insured vehicle and injuries to the car owner due to accident. 


It also covers for damages and losses that could arise due to thefts, natural calamities such as floods, earthquakes, tsunamis, etc. and human-made calamities such as riots, vandalism, etc. 


The wide range of coverage offered by Comprehensive Insurance makes it highly beneficial and car owners and advised to avail this insurance at the time of purchasing a new car even though the cost of the premium is slightly higher. 


Benefits of Comprehensive Insurance


  • Offers financial security to cover emergencies. 
  • Covers lawsuits that include legal fees against policyholder due to accident. 
  • Offers a complete coverage which covers both policyholder and vehicle. 
  • Damages to the vehicle caused by the policyholder are covered by Comprehensive Insurance.
  • Covers damages caused by fire, severe weather and human-made calamities.

Add-on Insurance Covers 


Listed below are some add-ons which you can include in your policy to gain maximum benefits and protection for your car: 


  • Roadside Assistance : If your vehicle stops working suddenly in the middle of the road, your insurance company with come for your rescue. They will assist you in taking your vehicle to the nearest service centre.  


  • Engine Replacement : If your engine is damaged due to some reason, your insurance company will help you get your engine replaced when you subscribe for Engine Replacement add-on.


  • Nil Depreciation Cover : This add-on helps you in achieving the maximum compensation for your car. The vehicle will be insured to the invoice price so that there is no loss due to the depreciation of the car. 


Bonus Tips on Reducing Cost on Car Insurance


Opting for a lower coverage is not the only way to reduce your premium cost of car insurance plan. To lower your car premium amount, you can also: 


  • Install safety gears such as alarms and immobilisers to reduce the chance of thefts. 
  • Include the name of a more experienced driver to the plan, because premium cost increases if the driver is less experienced. 
  • Have minimum distractions such as phone calls while you drive, and be a safe and responsible driver to avoid any road mishaps. 


Accidents are one of the most unfortunate and unpredictable things that can happen, which makes it important for us to stay prepared in every situation. Invest in the right car insurance policy with Royal Sundaram today and be secured for life!