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The Importance of Car Insurance Background Checks in India

By Juhi Walia
18 August 2022, 4:35 PM

A car insurance background check in India is essential for all policyholders. This pre-application process helps the insurer understand the applicant's creditworthiness and financial stability, which can be accessed through digital means.

This process reduces financial loss even further by dealing with fraudulent claims or paying too much on behalf of an applicant, and it usually lasts no more than 24 hours. At the end of this time, if the application has been approved, then there are no fees charged to the policyholder for using digital channels or postal services respectively.

Let's delve into the intricacies of background checks for car insurance in this article. 

Importance of Car Insurance Background Checks in India

A background check is an important step that most insurers follow before offering a car insurance policy. Car insurance background checks help insurance companies in mitigating both frauds and overclaims. It also helps reduce unnecessary claims which can only be made by stating false information regarding car accidents.

How does a Car Insurance Background Check Work?

A car insurance background check requires the following basic steps:

  • They will enquire about your personal and motor vehicle details from your driver's licence and vehicle registration certificate.
  • The car insurance company will then make enquiries with the transport department as well as the police department of your area.
  • The insurance company will contact the bank to verify your financial details.
  • A fraud questionnaire will then be administered to decide if you are fit enough for the policy.
  • The insurance company will also contact your employer and other personal references to help them understand your suitability for such a policy.
  • If the results of the above process are satisfactory, your application will be accepted, and you will receive a policy.

Does Car Insurance Background Check Require Your Consent in India?

A car insurance background check is required if you are applying for a vehicle loan; hence, you will have to share your vehicle details along with other information mentioned here.

However, If you want to buy a car insurance policy, it is up to to the insurer to do your background check. In many cases, insurers skip the same based on the profile of the policyholder and issue him/her a new policy. 

Many people avoid car insurance background checks because they think they will not get insured due to their poor credit record, records of evading payments, etc. However, the truth is that even small-time offenders can get insured at a higher premium.

Also, you need to understand that a car insurance background check is completely free, and there are no hidden charges involved in this process. Even if your application is not approved, you will not be charged for it; hence, there is absolutely no risk of financial loss.

Information That Car Background Checks Examine

Name, age, address and vehicle registration details, contact details with reference to the insurance company, basic and personal information such as latest phone numbers, credit history, policy history, etc.

Who Needs Such a Background Check?

In India, several car insurance companies are known to take every measure possible to avoid denying a car insurance claim. This is because they know that once your claim is denied, you will not come back for their products. 

If the company denies your claim, it could damage its reputation in the eyes of the public, on whom they depend on generating a great deal of business. 

The car insurance background check in India is used to find out whether any negative influences have identified themselves in your name. This helps the company eliminate any potential risks it may face. 

To get the best cover and be protected as much as possible, it is important to understand how getting insured works and what are the things that they look for. One of these things includes your previous records or even if you have an accident record or not, and this is precisely what an insurance company would look at before giving you the cover you need.


Understanding the importance of car insurance background checks in India and how they can help you get insured is important. This will help you prevent unnecessary expenses and fees you may have to pay for insurance due to fraud or false claims. 

It is also important to remember that there are no hidden charges associated with this process. Hence, if you want good cover, it is better to apply for a car insurance background check before buying a policy as this way, you can skip any payments that the company may charge.

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1. Is it important to have a background check done for your vehicle?

Yes, It is very important to have a vehicle check because if you don't have the proper documents with you, your car will not be insured by any car insurance company, and you will suffer financially.

2. What to remember about car insurance background checks in India?

The government of India has made it mandatory for anyone who owns a motor vehicle to get insured, and this is done through a certificate that is issued by the transport department from your state. 

3. What convictions affect car insurance?

Even a small offence such as a speeding ticket can affect the amount of insurance you are eligible for.

4. Do car insurance companies check social media accounts?

They may check social media accounts to see if you are a good or bad driver. This is why it is important to keep your social media page clean and updated properly all the time.

5. Why do some companies offer discounts on car insurance?

This is because they depend on the business they do. They also offer different packages that they can sell.

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