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Different Types of Car Insurance Policies and Add-on Covers

By Vikas Chandra Das
04 August 2022, 11:27 PM

As a responsible car owner, it is of utmost importance to have car insurance for your four-wheeler. It is also made mandatory by the government to have a basic car insurance plan. For this matter and the protection of your car, it is necessary to understand your car insurance coverage. Depending upon your car and the financial liability that comes with it, you can buy various types of insurance policy coverages and add-ons.

You can now buy car insurance online or offline. There is no difference in the policy or coverage in either case. Depending upon your convenience and needs, you can decide if you want to buy your car insurance online or offline.

You need to keep certain things in mind before buying car insurance. Check the roads you travel more. See if it is coming into regular use or for occasional long trips. Make sure to know the purpose of your buy, whether you are buying it for your home or office. Based on these factors, you can make the best choice for a new car insurance policy.

One of the primary things to take care of is financial and legal liability. Make sure to choose an insurance policy that offers complete protection in case of any unfortunate circumstances or uncomfortable situations.

Your car insurance policy should come in handy at all such points. To get over any financial implications, have adequate car insurance with you. After all, the main purpose of car insurance is to provide extensive help whenever and wherever needed.

Let's check out all the car insurance types and choose the one that serves us the best.

Different Types of Car Insurance

There are various options of insurance policies available at your disposal. Know everything covered under these policies to make the right choice for yourself. Some types of car insurance are:

1. Comprehensive Car Insurance Policy

This is a package policy covering third-party liabilities, damage costs, loss due to theft or a natural disaster, etc. You will receive the full IDV in case your car goes stolen or is damaged beyond repairs.

2. Standalone Own Damage Car Insurance Policy

As the name suggests, this policy takes care of the damage to the policyholder's car. This policy does not extend to any third-party liabilities.

3. Third-party Car Insurance Policy

This mandatory policy requires everyone to drive their vehicle on Indian roads. This policy covers all damages to the third party in case of any unfortunate death or accident.

Add-on Covers

Over and above this, there are add-on covers that you can add to your base plan. This will protect your car from any liability that arises over and above a comprehensive car insurance policy or a standalone own damage policy. A third-party liability policy can allow you to add a personal accident cover and passenger cover over the same. You can buy this car insurance add-on online as well.

Some common add-on covers available for an additional premium are:

1. Personal Accident Cover

As the name suggests, this cover protects the owner or car's driver in case of unfortunate mishaps, accidents, or road collisions.

2. Passenger Cover

This cover protects your fellow passengers in case of an accident or damaging situation.

3. Zero Depreciation Cover

The zero depreciation in car insurance helps you get a complete claim on any spare parts of the car without factoring in depreciation.

4. No-claim Bonus Protection Cover

If you do not file for a claim during the tenure of your policy, you become eligible for NCB on your car insurance renewal. But that bonus reduces to zero with a single claim. You can protect this bonus even by claiming with an NCB protection cover. However, the insurer can restrict the number of claims during the policy period.

5. Roadside Assistance Cover

This cover assists you on the road throughout your journey. The insurance provider has many contacts in hospitals and with mechanics and garages. If you undergo any inconvenience on the road, this cover prevents you from such situations.

6. Tyre Security Cover

This cover only protects one spare part of the car. Any damage or wear and tear caused to your tyre are covered under this add-on.

Read more - What is Additional Coverage in Car Insurance


Evaluate different types of covers and the base car insurance policy. Once you have decided on the type of policy and add-on covers to buy, visit a car insurance provider near you to make the best choice. 

Read more - 8 Things a First-time Driver Must Know


1. Is there any risk in buying car insurance online?

No. There is absolutely no risk in getting car insurance online. It is as secure as an offline purchase.

2. Is it also mandatory to have add-on covers?

Except for a personal accident add-on cover, all other add-ons are optional and are optimised for every owner's personal needs. 

3. Should I get an agent to buy car insurance?

Buying a policy from an agent or dealer will increase your cost with the addition of commissions the intermediaries will earn from the same. If you do not want to pay such extra fees, buying your policy and add-on covers with a bit of research is advisable. You can always come to us at Paytm Insurance for buying the right car insurance policy and add-ons.

4. What is the first step in buying car insurance?

The first step in buying car insurance is to see how much coverage you need and what type of insurance policy you should consider buying.

5. What should I know before getting car insurance?

Know all the imperatives. The road you will travel, the coverage amount, the type of policy, your car's usage, and everything your car insurance company has to offer to match your needs. It will help you make an informed decision.

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