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A Guide to Getting the Best Car Insurance Coverage

By Juhi Walia
12 August 2022, 4:57 PM

What is the ideal auto insurance policy? Is there even such a thing? If you have these questions, read on to know more about getting a suitable insurance policy for your car.

The Motor Vehicles Act, 1988, mandates car insurance for car owners to meet the legal requirements. But other than meeting a legal requirement, you will find that a car insurance policy can offer you multiple benefits.

You need to know what to look for to enjoy the maximum benefits from your new car insurance.

No, you don't have to be a financial wizard pulling to pick the right car insurance policy. But knowing a few basic automobile insurance facts can be a great help.

Types of Car Insurance Policies

The first step to understanding 4-wheeler insurance better is to know the types of insurance you can get for a car in India. In India, three types of car insurance prevail:

  • Third-party insurance
  • Comprehensive insurance
  • Standalone own damage (OD) insurance

Third-party Insurance

Third party car insurance policy covers a third party's damages, injury, or death. The sole beneficiary is the third party; this type of insurance is required by law if you want to drive a car.

Comprehensive Insurance

Comprehensive car insurance benefits you get from comprehensive insurance are many. You are covered for accidents, natural calamities, theft, riots, and other items. You are also covered for third-party benefits. You will get a no-claim bonus (NCB) if you don't claim in a year. The NCB will result in premium discounts for policyholders on renewal.

Standalone OD Insurance Policy

The name itself defines it. You will get covered for any damage or loss of your car due to an accident, natural or man-made disasters, theft, etc. Like a comprehensive policy, a standalone own damage car insurance plan also allows you NCB based on not filing a claim in a year. But this policy alone does not allow you to drive legally on the road.

Tips to Find the Ideal Car Insurance Policy

Now that you know the types of car insurance you can get in India, you can choose the perfect insurance plan if you know what to look for. These tips should help:

Be Aware of Your Requirements

Study the features of the various auto insurance types and the car insurance details for each type. Relating the insurance plan to your specific requirements can enable you to make the right choice.

Shop Around

Once you decide on the type of insurance you want, you would do well to compare car insurance policies offered by various car insurance companies. It will surprise you how certain variables like the sum assured, add-ons, exclusions, and inclusions can vary from one company to the other.


The number and type of add-ons (additional benefits) that various car insurance providers offer also vary considerably. Add-ons are exclusive to comprehensive insurance policies. But you need to ensure that you aren't paying for benefits you don't need. On the other hand, some car insurance add-ons can prove to be indispensable.

Claim Process

A car insurance claim process should be hassle-free when you are already hassled due to damage to your car. You need financial assistance instantly; you must be sure you will get it through a customer-friendly claim procedure.

Claim Settlement Ratio (CSR)

An insurer's car insurance claim settlement ratio is the ratio of claims settled against the number of claims received per year. This is again a figure that varies from one insurance provider to another. Choose to buy insurance from a company where you stand the best chance of settling your claims.

Be Transparent

When you apply for a new car insurance policy, you must answer many questions in the application form. Answer the questions in your insurance application accurately. If you miss out on information or falsify facts, you may end up on the losing end when you have to file a claim. It could even lead to the cancellation of your car insurance policy.

Read the Fine Print

It is prudent to read the terms and conditions of your new car insurance policy carefully before paying for the first premium. Ensure that no clause may disadvantage you if you need to file a claim.


An ideal car insurance plan should give you maximum coverage for any loss associated with your four-wheeler. You should go for a comprehensive insurance policy to achieve anything near this.

If you follow the tips provided here, you can hope to find a car insurance policy that best meets your needs while not putting you out too much financially. That is what you need to look for in your quest for the ideal car insurance coverage.

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1. Do I require car insurance?

Yes, you need car insurance to be legally and financially safe. A third-party liability cover makes you legally compliant, while the own damage component of your policy ensures protection against vehicle damage and loss.

2. What is the difference between standalone (OD) insurance and comprehensive car insurance?

With standalone or own damage (OD) insurance, you get coverage for various types of damage to your car, including theft or loss of the vehicle. It is useful if you already have a third-party car insurance policy. A comprehensive insurance policy covers third-party and your damages, including property loss, injury, death, etc.

So, the primary difference between a standalone insurance policy and a comprehensive one is that while a standalone policy covers only your damages, a comprehensive policy also extends to third-party liabilities.

3. Is no claim bonus cumulative?

Over several years, you can build up your no-claim bonus (NCB). You get your NCB as a discount on your annual premium. It is the reward you get from your insurance company for not filing a claim during your car insurance policy term. 

4. Is no claim bonus transferrable if I switch to another insurance provider?

If you move to another provider in the mid-term of your car insurance provider, your no-claim entitlement will be accepted by the new company. The new insurer will check the documents thoroughly before approving the NCB transfer deal.

5. What if I falsify my car insurance application?

You lose your trust by providing inaccurate or incomplete information to the insurer. If your insurance company finds out you provided them with wrong or incomplete information, it could even cancel your car insurance policy. So, when you buy car insurance, you should answer all the questions correctly. 

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