Car Insurance

Four words – You. Need. Car. Insurance.

A car insurance policy is an agreement between you and your insurance company – you agree to pay a premium each year in return for a promise from your insurance company to cover damages caused to your car or liabilities caused to a third-party.

There are three prerequisites for driving in India: driving license, valid registration number of the vehicle, and yes, a valid Car insurance policy.

We all need car insurance, but you may have questions regarding car insurance.

Especially before you buy the policy.

Let us simplify car insurance for you.

What Does Car Insurance Cost?

The answer is : There is  no fixed cost. It depends on the following six factors. Let’s understand why and how:

1. The value of your car

  • Insured Declared Value(IDV)

Your insurance cost depends on the value of your car. It’s called the Insured Declared Value or IDV. You can opt to adjust this amount.

  • Claimable Amount

The IDV is the maximum amount the insurance company promises to pay during a claim.

  • IDV affects premium

This can affect your car insurance premium amount. The higher the IDV, the higher is your premium.

  • Don’t forget depreciation

With usage, the parts of your car are subjected to wear & tear. So, when it comes to replacing or repairing these parts, the insurance company takes depreciation into account. So roughly:

Market value – Depreciation = Insurance payout

  • You can lower your IDV

The IDV is not fixed. You can opt for an insurance with a lower IDV. This can lower your premium cost. But remember, at the time of claim, if the repair cost of your car is more than the IDV amount which you declared, you will have to pay the difference from your pocket.

2. The type of car insurance

Not every car insurance policy offers the same coverage. It depends on the type of car insurance policy you buy.

There are three main kinds of insurance policies available for your car.

1) Third-Party

This is a bare-minimum policy. It covers only the damages caused to another person and his/her property. This kind of car insurance policy has the lowest premium.

2) Comprehensive

This policy covers all kinds of damages—to your car, another person’s property, and the insured car’s owner-driver.

Damages include:

  • Collision
  • Theft
  • Fire
  • Sabotage
  • Natural occurrences
  • Man-made calamities

Since this type of insurance offers greater coverage than a third-party insurance. It costs more.

Your basic comprehensive car insurance premium consists of:
  • Cost of third-party cover
  • Cost of Own damage cover
  • Personal Accident cover for the owner (Rs. 100)
  • Goods and Service tax of 18%*

*May change over time.

3) Zero Depreciation

This is an Add-on to a Comprehensive car policy. If you opt for this cover, your insurer will not take depreciation into account at the time of claim. It has the highest premium.

Why you need Zero Depreciation Add-on
  • The value of your car decreases with time.. This is called Depreciation. Your insurance company only pays a portion of the bill as the remaining amount is deducted on the account of depreciation. As per this add-on, your insurer will pay the maximum payable amount of the whole bill without considering depreciation.
  • The maximum number of claims allowed with a Zero Depreciation car insurance policy is 2.

Here’s the approximate cost of a car worth Rs. 4 lakh with an engine capacity of 1,200 cc.

Third-party PolicyComprehensive PolicyZero-Depreciation
Rs. 2,237Rs. 6,000Rs 8,000

These costs further increase if you buy more  Add-ons.

1. Add-on coverage

You can increase the protection your car insurance offers with the help of add-ons. The more the add-ons on your insurance policy, the higher the car insurance premium.

The four common add-ons are:

  • Engine protection
  • NCB protection
  • Invoice cover
  • Personal Accident cover (paid driver or passenger)

2. Your car’s age

As we read earlier, the Insured Declared Value depends on your car’s value. But, this reduces every year. So, the older a car is, the lower is its value. This can lower your premium—and the sum assured.

However, age also makes a car riskier and more susceptible to damages. So, car insurance companies often check your car’s health while deciding the premium.

3. Extra security features

One of the easiest ways to reduce your car insurance premium is by installing anti-theft and other security features.

This is because insurance companies are in the business of lowering your risk.
This comes at a price—the premiums you pay.

The lower the risk, the lower is your insurance cost.

4. Your claim history

Car insurance companies reward good drivers and those who do not claim.
This is done through a ‘No-claim Bonus’ and is in the form of a discount on your insurance premium. No claim bonus reduces your car insurance cost.

How To Buy Car Insurance?

Here’s how you buy insurance in 4 simple steps.

Step 1:
Get your car’s details—manufacturing date, engine and model specifications, the registration number of your car, and market value.

Step 2:
Check the maximum and minimum Insured Declared Value (IDV) applicable for your car. You need a policy with maximum coverage and minimum premium. Setting the right IDV will help you achieve just that.

Step 3:
Check for the insurance policies available, the services they offer and the liabilities they cover. Check for add-ons too if you need them.

Step 4:
Reach out to the insurance company or its agent, a dealer or an insurance broker. Fill out the application form and pay the premium. This is possible online as well.

Why You Should Compare Car Insurance Policies?

Simple—to get the best deal.

And, here’s what makes your deal the best:

Whom To Buy Insurance From?

You have four options —an agent, dealer, broker or the insurance company directly. Here’s what they offer (or not):

WhoRepresents an insurance companyCar sellers and vendors with insurance tie-upsLicensed parties who sell multiple insurance policiesThe insurer offering online purchase services
What do they offerMultiple policies from a single insurance companyExperts in selling cars bundled with car insurance policiesOffer multiple policies across insurance companies along with after-sales servicesBuy insurance online from the company directly without any intermediary’s help
BenefitsThey are experts in the policies offered by one company. They also offer help with claimsYou buy two products – a car and a insurance policy – at the same time. They take care of your documentation and paperwork.They can help compare various policies available based on your needs. They also offer claims assistance and other services.They know exactly which policy suits you. They can guide you the best with claims. Buying online is fast and easy.
DrawbacksMay not help you choose the best policy across insurance companiesMay only offer insurance based on their tie-ups. It could be costlier with extra add-ons you don’t need.They do not have the final decision-making power. Only the insurance company has the power to decide. You may not get to compare all the policies available in the market.
When do you select this option?If you finalized an insurance company, but not the policy.When you do not want to spend time and energy on documentation.When you want to compare and buy the most suitable policy.When you have finalized a policy, and want to buy it online by yourself.

But, wait! Don’t rush right away!

How To Renew Your Car Insurance Online?

In case your car insurance policy is about to expire or probably has already lapsed. And you want to renew the car insurance policy as quickly as possible.

You can do so by renewing the policy online. it is easy, quick, hassle-free, paperless, and can be purchased on-the-go.

All you need to do is go to the insurer’s website, filling in your details, choose the desired policy and make the payment.

Additionally, you can customize your policy with add-on covers offered by us that will widen your core policy.

Why You Should Renew Your Car Insurance Policy?

  • To get protection against any financial loss in case of fortuitous events of car accidents or theft.To retain your No-Claim Bonus(NCB). Because a delay of more than 90 days, and you will lose the benefit of NCB, which means no discount on the premium amount.
  • To avoid policy rejection or you may end up with loading (a fine or penalty)
  • To get protection against any penalty or legal issues

How To Renew Your Car Insurance Online with Acko General Insurance?

Step 1: Choose the Policy:

Acko General Insurance offers different policies and a wide range of add-on covers to customize it as per your requirements You need to select the policy, which suits you the best. Types of Policies offered are:

  1. Third-party
  2. Comprehensive(Third Party + Own Damage)
  3. Zero-Depreciation (Comprehensive + Zero-Depreciation add-on cover)

In addition, you can opt for multiple add-on covers along with Comprehensive or Zero Depreciation type of policies.

Step 2: Fill up the form

The next step is to fill up the form.

You will need the following information while filling in your details:

  • Car Make and Model details
  • Registration details
  • Car Number
  • City and RTO’s Address
  • Contact Information
  • Previous Policy and Claim History

Once the form is filled with the required and appropriate information, click on ‘check out’ for making the payment. When the payment has been confirmed, you will receive your insurance policy in your inbox within minutes.

To renew your car insurance policy after expiry date

Always stay protected by getting your car insured against any financial loss that may occur due to theft, accidental damage, or natural/man-made calamities.

Do not delay the renewal of your policy as you could lose on the No Claim Bonus which got accumulated because of your good driving habits.. Additionally, you can save time to get the policy instantly rather than fixing an appointment with the company’s surveyor for  vehicle inspections.

But in case, if your policy has expired or you missed the expiry date, here’s how you can still renew:

  1. Fix an appointment for your vehicle’s survey.
  2. The insurer  will send a surveyor.
  3. The surveyor will inspect and take photographs of your car. To ensure your car is in a condition to get approval for the renewal.

In case there are some pre-existing damages, you might have to get them repaired before the insurance proposal is accepted for renewal.

What are the documents required if my car insurance policy has lapsed?

You will need the following documents:

  1. City in which the vehicle is registered or the RTO’s address
  2. First registration date
  3. Manufacturer’s name and model details

Once the approval is confirmed, select the type of policy and other steps to renew your policy.

A better option would be, not to delay in the renewal procedure after the expiry date and do not drive unless and until you have an insurance policy.

Ask yourself these 6 questions before you buy.

Consider this as the checklist to follow before you consider or buy insurance. It will help you understand your needs and thereby identify the right insurance policy for you.

1) Is it for a new car or an old car?
a. This affects the type of car insurance you could buy.

2) Are you renewing your policy or buying a fresh one?
a. If you are renewing your policy, you have time constraints and more things to consider.

3) Do you need a Third-party insurance or a comprehensive one?
a.It affects the premium amount you pay today and the bills in future.

4) Do you need a Zero-depreciation policy?
a. It depends on how old your car is. The answer will affect your premium amount.

5) Do you have any No-claim bonus?
a. If yes, then can you transfer the accumulated benefits to your new policy?

6) What’s your priority—Lower premium today or lower bills in the future?
a.This decides if you should increase your voluntary deductible amount.

Which are the terms related to Insurance?


These are extra services and coverage you ask voluntarily for your policy. They push up your premium but also add extra coverage.


Insured Declared Value (IDV) is the market value of your car. It lowers over time due to depreciation

No Claim Bonus (NCB)

Insurers reward you when you do not make a claim. Every consecutive no-claim year gets you a bonus or premium discount called ‘No-Claim Bonus’.

Zero Depepreciation

Ensure that your insurer pays you the whole value of your car without deducting any depreciation through a Zero-Depreciation cover.


You pay a small portion of the bill, say Rs 1,000. It’s called a Deductible. You can voluntarily increase this to lower premiums. But, at the time of claim you will have to pay the increased deductible amount from your pocket.


The coverage and services offered vary across different insurance policies. Here’s a look:

CoverageThird-Party InsuranceComprehensive CoverZero-Depreciation Policy
Damage due to collisionNoYesYes
Damage to a third-party vehicleYesYesYes
Damage due to fireNoYesYes
Damage due to natural causesNoYesYes
Depreciation feesNoNoYes
Personal Accident coverNoYesOptional Add-on
Engine protectionNoOptional Add-onOptional Add-on
NCB protectionNoOptional Add-onOptional Add-on
Invoice coverNoOptional Add-onOptional Add-on


  • Damage when driving under the influence of alcohol or intoxicating drugs
  • Damage during war and similar conditions
  • Damage when policy is not active
  • Regular servicing and expenses due to wear and tear
  • Damage when driving without a valid license
  • Driving a car that you do not own
  • When neither your drive nor you drove the car
  • Items stolen from your car

Things People Ask Us Often

Q) How to begin while buying an insurance policy?

Here’s your handy starter kit:

Buying a car insurance policy is not only a legal requirement but a savour in the time of need as well.

  • It is important to understand the basics of car insurance.
  • Chalk out your specific requirements, this will help you choose the correct type of insurance policy.
  • Try to allot some of your time in researching the facts and myths about car insurance, incomplete information may lead to dismay
  • After researching on the best car insurance policy, compare quotes offered by various insurers.
  • Buy add-ons as per your requirements. Do not go overboard with the number of add-ons, they increase the premium amount.
  • Once you buy your policy, go through the documents thoroughly. If you have any doubt or if you do not understand any statement, feel free to get in touch with your insurer.
  • Understand the process of claim, inclusions and, more importantly, the exclusions of a car insurance policy.

Q) Which insurance to get when?

Basic coverage:
If you want an insurance simply because it’s mandatory, then opt for a Third-Party Insurance policy

Protect your wallet:
If you do not want to spend from your pocket for car repairs and damage, then opt for a Comprehensive cover.

Remain stress-free:

If you never want to worry about details like exclusions, depreciation, etc., then opt for a Comprehensive cover with a zero-depreciation and other add-ons.

Q) Which coverage do I need?


Third-party cover

Let your insurance take care of damages caused to a third party. Own-damage cover

Your insurer will pay for the cost of repairs for your damaged car
Theft and fire protection

You don’t have to worry about losing your car worth lakhs of rupees

Coverage for damage from flood and earthquakes
Especially since Indian cities are susceptible to floods, landslides, and earthquakes

Personal Accident Owner Driver Cover
Don’t worry about the cost of treating injuries during an accident


Personal Accident Paid Driver Cover

If you have a driver, then you may need this add-on

Zero depreciation
This ensures your insurer pays the whole bill payment including depreciation

Doorstep claim service
You don’t  need to line up in queues to claim when times are already tough

Engine protection

Cost of getting your damaged engine repaired

NCB protection
To protect your No claim Bonus even if you make a claim in an active policy year

Return to Invoice cover
To get compensated as much as the invoice value of your car, in case it was completely damaged.

Pick up and drop service
For when you need your car repaired after an accident.

Q) What affects car insurance premiums?

Your premium depends on several factors:

  • Greater the coverage, higher the premium.
  • More services offered, higher the premium.
  • Car value. Costlier the car, higher the premium.
  • Car age. Older the car, lower the premium.
  • Claim history. Greater the claims, higher the premium

Q) How do I reduce my car insurance premium?

It’s time for you to get smart. Follow these eight smart tips to reduce your premium:

Consider lowering your Insured Declared Value (IDV)
Lowering the Insured Declared Value leads to a lower premium. However, remember, this means you will be allowed to claim a lower amount when your car is damaged beyond repairs.

Get only what you want
Not everything is covered, some services are optional. You can lower your premium if you opt for these add-ons.

Increase your Deductible
You pay a minimum amount of every bill, say Rs 1,000. It’s mandatory. But, you can raise this amount. Your premiums will then decrease.

Don’t claim for every small expense
If it’s just a matter of a few thousands, consider paying it from your pocket. You can then get a No-claim Bonus (NCB) and lower your premium by nearly 50%.

Renew your policy on time
You have a month, after the policy lapses, to renew. After that, you need to buy a brand new policy. You lose your NCBs and might have to pay a higher premium, for this default.

Get your details right
The premium may change with age, occupation and even car’s mileage. So, give all the details and you may enjoy a discount on your premium.

Install security devices
Cars with better braking, lock and anti-theft features attract a lower premium. You may want to consider installing these.

Join AAI
The Automobile Association of India offers a discount on own-damage cover premium to its members. So consider becoming a member.

Q) What to do after I buy?

Policy details
Check your policy document to ensure your name, car and policy details are right.

Policy document
Wait for up to 15 days. If you do not receive your policy document via email, then flag it to the insurance company. You need a copy for your policy in your inbox, at least.

Make copies
You need to keep a printout of the insurance policy in your car. Make copies of your insurance policy along with the rest of the documents, just in case.

Know the claim process
Be thorough with the claim process. Know the nitty gritties of the same. This ensures you do not miss out on a claim for small errors.

Notify the insurer
Keep the insurer informed of any damage or change in details. This includes changes in your name or a relocation.

Q) How do I make a claim?

Don’t worry. It’s very easy.

Step 1: Immediately after the  damage, note down the date and time. Also, take pictures of the damage.
Step 2: Call your insurance company.
Step 3: A survey will be arranged for reviewing the damages.
Step 4: You can then take the car for repairs.
Step 5: If the garage is part of the insurance company’s network, then your repairs will be cashless.