In India, bikes and cars are more than just modes of transportation. They are symbols of freedom, independence, and aspiration for many. If you own these vehicles, you can take them from bustling city streets to serene countryside roads, connecting you to different destinations and experiences. However, along with the joy of ownership comes the responsibility of safeguarding these vehicles against the uncertainties of the road.
With the increasing traffic density and the rising incidence of accidents, the need for motor insurance coverage for bikes and cars cannot be ignored. You want to protect your vehicles against unforeseen events such as accidents, theft, or natural disasters. Motor insurance policies in India can safeguard you and your vehicles against unforeseen circumstances on the roads.
What is a Motor Insurance Policy?
A motor insurance policy, also known as vehicle insurance, is a contractual agreement between an insurance provider and a vehicle owner (you) wherein the insurer agrees to provide financial protection against specified risks in exchange for a premium. In India, it is mandatory for all vehicles to have at least a basic level of motor insurance coverage (third-party) under the Motor Vehicles Act, 1988.
Knowing the finer details of motor insurance policies can help you select the right coverage tailored to your needs and circumstances. You can ensure adequate protection for your vehicle and financial security in the face of unforeseen events on the road.
Why Should You Buy a Motor Vehicle Insurance Policy?
While buying a motor insurance policy is a legal obligation, it is also a practical necessity and a wise financial decision. Here are several compelling reasons why you should consider purchasing a motor insurance policy:
-
Legal Compliance
As mandated by the Motor Vehicles Act, 1988, having a valid motor insurance policy is a legal requirement in India. Driving a vehicle on roads without motor insurance can result in fines, legal penalties, and even vehicle confiscation.
-
Financial Protection
Motor insurance can also provide essential financial protection against various risks, including accidents, theft, vandalism, etc. In the event of an unfortunate incident, the insurance cover helps mitigate financial losses, ensuring that you don't have to bear the entire burden of repair costs or compensation payments out of pocket.
-
Third-Party Liability Coverage
Third-party liability coverage in motor insurance policies protects you from legal liabilities arising from bodily injury or death caused to third parties by your vehicle. Without this type of auto insurance, you could be held personally liable for substantial compensation amounts, potentially leading to financial ruin.
-
Protection for Your Vehicle
An Own Damage (OD) motor insurance policy can cover your vehicle against damages resulting from accidents, theft, natural disasters, and similar unforeseen events. Whether it's repairing dents and scratches or replacing stolen parts, having comprehensive insurance coverage ensures your vehicle remains roadworthy.
-
Personal Accident Cover
You can also buy motor insurance policies that include personal accident cover for the owner-driver. These plans provide financial compensation in the event of accidental death or disability resulting from a road accident. Knowing that you and your loved ones are financially protected against unforeseen accidents can offer peace of mind.
-
Optional Add-On Covers
Insurers offer a range of optional add-on covers you can purchase to enhance insurance protection. These add-ons may include zero depreciation cover, engine protection, roadside assistance, and more, providing additional benefits tailored to your specific needs and preferences.
What are the Common Features of a Motor Insurance Policy?
Protection against legal liabilities for bodily injury, death, or property damage caused to third parties by the insured vehicle
Insurance against damages to the insured vehicle due to accidents, theft, vandalism, etc.
Compensation for the owner-driver in the event of accidental death or disability arising from a road accident
Policy period options, typically ranging from one to three years depending on the selected policy type
Deductible options to lower the premium
No Claim Bonus (NCB) for every claim-free year.
What are the Types of Motor Insurance Plans in India?
Third-Party Liability Insurance
This is the most basic type of motor insurance mandatory by law in India. The policy provides coverage against liabilities arising from third-party bodily injury, death, or property damage caused by the insured vehicle.
Comprehensive Vehicle Insurance
Comprehensive motor vehicle insurance offers extensive coverage, including third-party liability and OD cover for the insured vehicle. It protects against damages due to accidents, theft, vandalism, natural calamities, fire, or explosions.
Standalone Own Damage Insurance
This type of insurance offers standalone coverage for Own Damage (OD) without including third-party liability coverage. It is often chosen by vehicle owners who already have third-party liability coverage through a separate policy or government-mandated motor third-party insurance.
Long-Term Insurance Plans
In addition to annual policies, insurers also offer long-term motor insurance plans with two or three years of coverage. These plans provide convenience and may offer discounts on premiums compared to annual policies.
Pay As You Go (PAYG) Insurance
It is also known as usage-based insurance (UBI) and is a modern approach to motor insurance that offers a more personalized coverage solution. Unlike traditional insurance policies that rely on fixed premiums, PAYG insurance utilizes telematics technology to track and assess the actual usage patterns and driving behavior of the insured vehicle.
What are the Differences Between Third-Party and Comprehensive Motor Insurance?
The following table covers a third-party vs. comprehensive auto insurance comparison:
| Comparison Parameter | Third-Party Insurance | Comprehensive Insurance |
|---|---|---|
| Coverage | Provides coverage for third-party liabilities such as bodily injury, death, or property damage caused by the insured vehicle | Offers extensive coverage, including third-party liability as well as OD cover for the insured vehicle |
| Legal Requirement | Mandatory by law in India. | Optional as per personal preference |
| Own Damage Coverage | Does not include coverage for damages to the insured vehicle | Includes coverage to protect against damages to the insured vehicle due to various perils |
| Premium | Generally lower premiums compared to comprehensive insurance | Premiums may be higher due to the broader coverage provided |
| Financial Protection | Offers limited financial protection | Provides comprehensive financial protection for both third-party liabilities and damages to the insured vehicle |
| Suitability | Suitable for vehicles with lower market value or those on a tight budget | Suitable for vehicles with higher market value or owners seeking comprehensive protection against various risks |
| Recommended For | Recommended for vehicles with minimal risk of damage or budget-conscious individuals | Recommended for vehicles exposed to higher risks, such as new or expensive vehicles, or for individuals seeking comprehensive coverage and peace of mind |
What are the Common Inclusions of Motor Insurance Plans?
Motor insurance plans typically include several coverage options designed to protect the insured vehicle and vehicle owner against various risks and liabilities. These include:
- Protection against legal liabilities for bodily injury, death, or property damage caused to third parties
- Insurance against damages to the insured vehicle due to accidents, theft, vandalism, etc.
- Compensation for the owner-driver in the event of accidental death or disability arising from a road accident
- Optional enhancements/add-ons to the standard policy, such as zero depreciation cover, engine protection, roadside assistance, consumables cover, and more.
- Discount on the premium offered to policyholders for every claim-free year
- Emergency assistance services, including towing, roadside repairs, fuel delivery, etc. as per policy terms
- Reimbursement for medical expenses incurred by the insured driver and passengers for treatment of injuries sustained in a covered accident
What are the Common Exclusions of Motor Insurance Plans?
Here are some of the common exclusions of motor insurance plans:
- Damages resulting from regular wear and tear, aging, or deterioration of the vehicle over time
- Repairs or replacements necessitated by mechanical or electrical breakdowns of the insured vehicle, excluding damages resulting from accidents
- Any damages or liabilities arising from accidents while the driver is under the influence of alcohol or drugs
- Accidents or damages caused while driving without a valid driving license or in violation of traffic regulations
- Damages or losses incurred from unauthorized use of the insured vehicle, such as lending the vehicle to an unlicensed driver
- Accidents occurring while participating in racing events, speed testing, or any form of motor sports
- Damages or liabilities arising from the commercial use of a personal vehicle
- Damages or losses resulting from acts of war, terrorism, civil unrest, riots, etc.
Understanding the common inclusions and exclusions of a motor insurance plan can help manage expectations and ensure you have adequate coverage for potential risks.
Which Factors Affect Motor Insurance Premiums?
Here are the key elements that affect motor insurance premiums:
The make, model, and age of the vehicle are significant determinants of insurance premiums. Vehicles with higher market values or those prone to theft or accidents may attract higher premiums.
Insurers consider the age and driving experience of the policyholder. Younger drivers may face higher premiums due to their perceived risk of accidents.
A clean driving record with no past incidents may result in lower premiums, while a history of accidents may lead to higher premiums.
The geographical location where you register the vehicle influences insurance premiums. Areas with higher rates of accidents, theft, or vandalism may have higher premiums. Additionally, the purpose of vehicle usage, such as personal or commercial use, can affect premiums.
The extent of coverage chosen by the policyholder, including comprehensive, third-party liability, and additional riders, impacts the premium amount. Opting for higher coverage levels or lower deductibles typically results in higher premiums.
A history of previous insurance claims can affect future premiums. Modifications to the vehicle, such as aftermarket accessories or performance enhancements, can impact insurance premiums.
Modifications to the vehicle, such as aftermarket accessories or performance enhancements, can impact insurance premiums.
How to Calculate Motor Insurance Premium?
While the process of calculating motor insurance premiums can vary between insurers, you can estimate the premiums using an online calculator. Here's a simple guide including the steps involved:
Input details about the vehicle, including make, model, year of manufacture, and registration information.
Enter information about the primary driver, including age, driving experience, and claims history.
Select the desired coverage options, such as comprehensive, third-party liability, and additional riders or endorsements.
Choose the deductible amount for each coverage type, which is the amount the policyholder agrees to pay out of pocket before insurance coverage kicks in.
Submit the gathered information and review the calculated premium estimate provided by the online calculator.
Consider obtaining quotes from multiple insurers to compare premiums, coverage options, and discounts available.
For a more accurate premium estimate or assistance in selecting the right coverage, consult RB Advisors.
Once satisfied with the premium estimate and coverage options, proceed to purchase the motor insurance policy that best meets your needs and budget.
What are the Benefits of Buying Motor Insurance Online?
Motor Insurance can be broadly divided into three categories, and as per your needs, You may choose the motor insurance online plan that best matches your needs.
Convenience
Purchasing motor insurance online offers unmatched convenience. You can browse and buy policies from the comfort of your homes or on-the-go without the need to visit physical insurance offices.
Time-Saving
Online insurance purchase streamlines the process, eliminating the need for lengthy paperwork and manual form filling. It saves time for both you and insurers, with policies often issued instantly or within a short turnaround time.
24/7 Accessibility
Online platforms are accessible round-the-clock, providing flexibility to research, compare, and purchase the policy anytime that suits you, including outside of traditional business hours.
Cost Savings
Purchasing motor insurance online may benefit you with discounted premiums or special offers that are not available through offline channels. Additionally, purchasing directly from insurers online eliminates intermediary commissions, potentially resulting in lower overall costs.
Transparent Comparison
Online platforms facilitate easy comparison of multiple insurance policies, allowing you to evaluate coverage options, premiums, and features side-by-side to make informed decisions based on your specific needs and budget.
Instant Policy Issuance
Online motor insurance applications often result in immediate policy issuance upon successful payment, providing instant coverage and peace of mind for policyholders.
What Should You Consider While Buying Motor Insurance?
Motor insurance purchase requires careful consideration of several factors to ensure adequate protection and value for money. Here are essential aspects to consider when purchasing a suitable policy:
Your coverage needs
Assess your coverage requirements based on the type of vehicle, usage patterns, and risk profile. Determine whether you need basic third-party liability coverage or comprehensive coverage that includes OD protection and additional benefits.
Policy inclusions and exclusions
Review the inclusions and exclusions of the chosen insurance policy carefully to understand the scope of coverage and any limitations or restrictions that may apply. Ensure the policy aligns with your specific needs and provides adequate protection against potential risks.
Insurer's reputation
Choose a reputable motor insurance provider with a track record of reliability, prompt claims settlement, and excellent customer service. Research customer reviews/ratings to gauge the insurer's reputation and credibility in the market.
Premium
Compare premium quotes from multiple insurance providers to find a balance between affordability and coverage. Consider the Insured Declared Value (IDV), deductible, and available discounts to determine the overall cost-effectiveness of the policy.
Claim settlement process
Evaluate the insurer's claim settlement process, including documentation requirements, claim processing timeframes, and customer support mechanisms. Opt for insurers known for their hassle-free claims settlement procedures and prompt resolution of customer grievances.
Add-on covers
Explore optional add-on covers or riders the chosen insurer offers to enhance your insurance coverage further. Consider add-ons such as zero depreciation cover, engine protection, roadside assistance, etc., based on your individual requirements and preferences.
Policy terms and conditions
Read and understand the terms and conditions of the insurance policy, including policy duration, renewal procedures, cancellation terms, and any applicable penalties or fees. Clarify any doubts or queries with the insurer before finalizing the purchase.
What are the Documents Required to Buy Motor Insurance?
- Vehicle Registration Certificate (RC)
- Previous Insurance Policy Documents (for renewal)
- Driver's License
- Personal Identification Proof
- Address Proof
- Vehicle Purchase Invoice
What are the Steps to Buy A Motor Insurance Policy?
You can buy a vehicle insurance policy from the official website of an insurer or RenewBuy.com. Let’s get to the steps involved.
Steps to Buy Vehicle Insurance from An Insurer’s Official Website
Go to the official website of the motor insurance company and navigate to the ‘Motor Insurance’ tab.
Select the motor insurance plan that suits your requirements and preferences.
Fill in all the necessary credentials, such as vehicle details, personal information, and coverage options.
Click the ‘Buy’ button to proceed with the purchase.
Complete the payment process using the available payment options.
After successful payment, the insurance provider will email you a copy of the policy documents for your records.
Steps to Buy Vehicle Insurance from RenewBuy
Visit our official website and click the ‘Motor Insurance’ tab.
Select the type of vehicle for which you need insurance coverage.
Fill out the online form with relevant details, including vehicle information, personal details, and coverage preferences.
Compare the motor insurance plans presented to you and select the one that best meets your needs.
Tap on the ‘Buy Now’ button to initiate the purchase process.
A pop-up window will display the selected plan details and any additional riders available.
Proceed to make the payment online.
Upon successful payment, you will receive the motor insurance documents via email from RenewBuy.com, confirming your coverage.
What are the Benefits of Buying Motor Insurance Policy from RenewBuy?
Given below are the advantages of purchasing motor vehicle insurance from RenewBuy:
Convenient
Online motor insurance policy purchases are simple and time-saving because they may be completed from home. The process is stress-free because the insurance is issued in minutes.
No Paperwork
No documentation is necessary because the entire procedure of buying motor insurance is done online, and the process is hassle-free and straightforward.
Quick Comparison
The RenewBuy website makes it simple for users to compare various motor insurance plans online They may use this information to purchase the best coverage for their needs.
Cost-Efficient
There is no requirement to go to the primary office or any other location. The motor insurance may be obtained online, making the entire procedure less expensive.
Online Documentation
After purchasing the motor insurance online, a person will receive a soft copy via the registered email address shortly.
What are the Steps to Renew a Motor Insurance Plan?
- Visit the motor insurance renewal section on the official website of your insurance provider.
- Enter details such as age, date of birth (DOB), vehicle information, and previous policy number.
- Choose the best motor insurance plan for your needs by comparing different options available for renewal.
- Add any additional riders or coverage enhancements as per your requirements and preferences.
- Utilize the insurance premium calculator to calculate the premium amount based on your selected coverage and add-ons.
- Proceed with paying the premium to renew your motor insurance policy.
- You will receive a confirmation of policy renewal along with the updated policy documents via email.