29 Aug 2019
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In today’s world, almost every other household owns a car. Although most people prefer a two-wheeler for traveling shorter distances, a car is a much safer option, when it comes to long-distance commute.

Since your car provides you safety and comfort when traveling, the least you can do is protect it with a motor insurance policy. As a matter of fact, it is mandatory to have motor insurance if you own a vehicle under the Motor Vehicles Act 1988.

In this article, we will be explaining everything you need to know about motor insurance. This is your ultimate go-to guide for motor insurance in India.

Let us begin!

What Is Motor Insurance?

A motor insurance policy is a protection for your vehicle against any financial loss incurred due to damage or loss of the insured vehicle. You can buy motor insurance online as well as in-person (depending on your preference).

Why Do You Need to Buy Motor Insurance In India?

As per Indian laws, it is mandatory to take motor insurance for the vehicles running on the Indian roads. With motor insurance, you can rest assured that you (the policyholder) are financially covered against any bodily injuries and loss or damage to third-party caused due to road mishaps.

Types of Motor Insurance

Generally, there are three types of motor insurance available in the Indian market.

  1. Car Insurance

  2. Bike Insurance

  3. Commercial Vehicle Insurance

The following table provides a brief understanding of all the three insurance types.

Motor Insurance Types

Car Insurance

Bike Insurance

Commercial Vehicle Insurance

Brief Understanding

With a car insurance policy, you can cover for any physical damage incurred to your car due to a mishap.

A two-wheeler is more likely to face road mishaps compared to cars. Hence, if you own a two-wheeler, you must buy bike insurance.

The commercial vehicle insurance is provided to only those vehicles that are used for commercial purposes. It protects commercial vehicles against theft, loss, and damage due to natural disaster and accidents. The premiums depend on the market value of the vehicle.

Sub-Types

There are two types of car insurance in India.

  1. Third-Party Insurance Cover – It is mandatory insurance for all cars. It covers you from any legal liabilities that cause death or damage to the third-party.

  2. Comprehensive Insurance Cover – It is a type of insurance cover taken by people based on their requirements. The comprehensive insurance cover comes with hefty premium amounts. It covers you against theft, damage caused due to accidents and natural disasters.

There are two types of bike insurance available in India.

  1. Third-Party Insurance Cover – Much like third-party insurance cover for cars, this policy covers third-party death, injuries, and damages caused by your two-wheeler.

  2. Comprehensive Insurance Cover – Similar to comprehensive cover for cars, this covers your bike from theft, natural disasters, and any physical damage.

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Motor Insurance – Add-On Covers

You can also opt for additional coverage on your existing motor insurance policy. Several insurance providers offer add-on coverage that includes –

  1. Zero Depreciation Cover 

We all know for a fact that as your vehicle ages, it's market value depreciates. So, when you file a claim, it is processed after deducting the depreciation rate. However, if you take a zero depreciation cover, no amount will be deducted after that.

  1. Engine Protection Cover 

If there is any damage to the vehicle’s engine, then with this add-on cover, you can cover the expenses incurred for its repair or replacement.

  1. Return To Invoice Cover 

If your vehicle is completely damaged, this covers entitles you to receive the original on-road cots of your insured vehicle.

  1. NCB Protect Cover 

In case you have never claimed your policy term, then you are entitled to No Claim Bonus (NCB). With NCB protect cover, You can avail discounts on your motor policy renewal motor policy renewal online or in-person.

  1. Consumables Cover 

Every vehicle has a few consumable parts like nuts, bolts, ball-bearings, engine oil, AC gas, coolant, and grease, which are not covered under the regular motor insurance policy. With this add-on, the coverage is extended to the consumables parts as well.

Motor Insurance – Inclusions and Exclusions

A primary motor insurance policy provides coverage for the following things-

  • Damage due to accidents or natural disasters

  • Loss or theft of the vehicle

  • Personal accident cover for the diver

The motor insurance policy does not provide coverage for the following things –

  • Aging, wearing and tearing of the vehicle and its components

  • Mechanical and electrical breakdown

  • Damage caused due to the influence of intoxicating substances

  • Consequential loss

  • Damage caused by driver in possession of an invalid driver’s license

  • Loss or damage outside the stated geographical location

Factors Affecting Motor Insurance Premiums

Your motor insurance premium amounts can be affected due to the following reasons –

  1. Type of Insurance Premium 

As we mentioned earlier, the comprehensive insurance coverage offers required protection to the vehicle, but it often comes with high premium rates. On the other hand, third-party insurance coverage offers affordable premium rates.

  1. Vehicle Model, Make and Variant 

The premium amounts differentiate depending on the vehicle model and version.

  1. RTO 

The car insurance premiums are calculated based on the location of the vehicle registration. The areas are categorized as:

i) Zone A

ii) Zone B

  1. Insured Declared Value 

If the market value of the vehicle is high, the premium rates will be high.

  1. Age 

Higher premium rates are charged to young drivers as compared to old drivers.

  1. Claim History 

If you do not file a claim during your policy term, then you are entitled to No Claim Bonus of up to 50%.

How to Reduce Motor Insurance Premiums?

Are you wondering how to reduce the premium amounts? Well, in that case, here’s how you can do that without compromising on your motor insurance coverage.

  1. Install Safety Devices

Enhance your vehicle’s protection by installing safety devices in it. Not only does it reduce the risk associated with your vehicle, but you also get offers on premium amounts.

  1. Avoid Filing Small Claims

If you keep claiming even smaller expenses that could be easily covered from your pocket, you refrain yourself from No Claim Bonus.

  1. Judiciously Opt for Add-ons

Even though add-ons provide enhanced coverage, they also come with hefty premiums. Hence, it is advisable to opt for add-ons that you require the most.

Over to You

After this, you will be well-versed with motor insurance in India. We believe that we helped you with making an informed insurance decision.

Are you looking for motor insurance renewal?

Get in touch with us at Finserv MARKETS. With Bajaj Allianz Motor Insurance Renewal at Finserv MARKETS, you can renew your motor insurance easily online. Also, you can benefit from features like 24x7 assistance, cash-free servicing, and so much more.

Apply for a Bajaj Allianz Motor Insurance available on Finserv MARKETS, today!

 

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