A car insurance is like an agreement between you and your insurance company – you agree to pay a premium each year in return of a promise from your insurance company to cover damages caused to your car or liabilities caused to a third-party.
There are three pre-requisites for driving in India: driving licence, valid registration number of the vehicle, and yes, Car insurance.
We all need car insurance, but you may have questions regarding it.
Especially before you buy it.
Let’s simplify car insurance for you.
Simple answer: There’s no fixed cost. It depends on six factors. Let’s understand why and how:
Market value – Depreciation = Insurance payout
Not every insurance offers the same coverage. It depends on the type of insurance.
There are three main kinds of insurance policies available for your car.
This is a bare-minimum policy. It covers only the damages caused to another person and his/her property. It has the lowest premium.
This policy covers all kinds of damages—to your car, another person’s property, and the insured car’s owner-driver.
Since this type of insurance offers greater coverage than a third-party insurance. Naturally, it costs more.
*May change over time.
This is an Add-on to a Comprehensive car policy. It lowers the money you pay during claimed car repairs. It has the highest premium.
Here’s the approximate cost of a car worth Rs. 4 lakh with an engine capacity of 1,200 cc.
|Rs. 2,237||Rs. 6,000||Rs 8,000|
These costs further increase when you take on Add-ons.
You can increase the protection you 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:
As we read earlier, your Insured Declared Value depends on your car’s value. But, this reduces every year. So, the older your car, 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 companies often check your car’s health while deciding the premium.
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.
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.
Here’s how you buy insurance in 4 simple steps.
Get your car’s details—manufacturing date, engine and model specifications, the registration number, and market value.
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.
Check for the insurance policies available, the services they offer and the liabilities they cover. Check for add-ons too if you need them.
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.
You have four options in front of you—an agent, dealer, broker or the company directly. Here’s what they offer (or not):
|Who||Represent an insurance company||Car sellers and vendors with insurance tie-ups||Licensed parties who sell multiple insurance policies||The insurer offering online purchase services|
|What they offer||Multiple policies from a single insurance company||Experts in selling cars bundled with car insurance policies||Offer multiple policies across insurance companies along with after-sales services||Buy insurance online from the company directly without any intermediary’s help|
|Benefits||They are experts in the policies offered by that company. They also offer help with claims||You buy two products – a car and insurance – 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.|
|Drawbacks||May not help you choose the best policy across insurance companies||May 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||If you finalized an insurance company, but not the policy.||When you do not want to spend time and energy in 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!
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.
Renew your car insurance policy online with us because it’s easy, quick, hassle-free, paperless, and can be purchased on-the-go.
Acko General Insurance offers a complete custom-made policy when it comes to car insurance. We offer:
Additionally, you can customize your policy with add-on covers offered by us that will widen your core policy.
Step 1: Choose the Policy:
As Acko General Insurance offers different policies and a wide range of add-on covers to customize as per your requirements, you need to select the one, which suits you the best. Types of Policies offered are:
In addition, you can opt for multiple add-on covers along with Comprehensive or Zero Depreciation types of policies.
Step 2: Fill up the form
The next step is to fill up the form.
While filling up the form, the below mentioned information is required:
Once the form is filled up with the required and appropriate information, check out for payment. When the payment has been confirmed, you will receive your insurance policy straight in your inbox within minutes.
Always stay protected under the umbrella of car insurance against any financial loss that may occur due to theft, accidental damage, or natural calamities.
Do not delay renewals as that would also help to retain the No-Claim Bonus for you. Additionally, you can save time to get policy instantly rather than fixing an appointment with the company’s insurer for vehicle inspections.
But in case if your policy has expired or in case you missed the expiry date, here’s how you can still renew:
In case there are some pre-existing damages, you might have to get them repaired before the insurance proposal is accepted for renewal.
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.
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 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 bonuses?
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 future?
a.This decides if you should increase your voluntary deductible amount.
Scientists talk science. Bankers talk money. Insurers talk insurance. Know this language before you deep-dive into the world.
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 thanks to depreciation
Insurers reward you when you do not make a claim. Every no-claim year gets you a bonus or premium discount called ‘No-Claim Bonus’.
Ensure 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.
The coverage and services offered vary across insurance policies. Here’s a look:
|Coverage||Third-Party Insurance||Comprehensive Cover||Zero-Depreciation Policy|
|Damage due to collision||No||Yes||Yes|
|Damage to a third-party vehicle||Yes||Yes||Yes|
|Damage due to fire||No||Yes||Yes|
|Damage due to natural causes||No||Yes||Yes|
|Personal Accident cover||No||Optional Add-on||Optional Add-on|
|Engine protection||No||Optional Add-on||Optional Add-on|
|NCB protection||No||Optional Add-on||Optional Add-on|
|Invoice cover||No||Optional Add-on||Optional Add-on|
Here’s your handy starter kit:
Your job does not end with buying an insurance. Understand the claim process. You may not have time to learn it when an emergency strikes.
If you want an insurance simply because it’s mandatory, then opt for a Third-Party Insurance
Protect your wallet:
If you do not want to spend from your pocket for car repairs and damage, then opt for a Comprehensive cover.
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.
Let your insurance take care of other people’s problems and damages…
…and the damages to your car too from any accident or collision
Theft and fire protection
So 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
This ensures your insurance pays the whole bill payment including depreciation
Doorstep claim service
You shouldn’t need to line up in queues to claim when times are already tough
Comes handy when water threatens to flood your car’s beautiful engine
To protect your No claim Bonus even if you make a claim in a 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.
Your premium depends on several factors:
It’s time for you to get smart. Follow these eight smart tips to reduce your premium:
Consider lowering your IDV
Lowering the Insured Declared Value leads to a lower premium. However, remember, this means you will be allowed to claim a lower amount, in case your car was 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 fall.
Don’t claim for every small expense
If it’s just a matter of 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, it is considered a 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 do attract a lower premium. You may want to consider installing these.
The Automobile Association of India offers a discount on own-damage cover premium to its members. So consider becoming a member.
Documents are notorious for getting details wrong. So, check your policy document to ensure your name, car and policy details are right.
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, atleast.
You need not keep a print out of the policy in your car. Make copies of your insurance policy along with the rest of the documents, just in case.
Know the claim process
Read up on what you need to do while claiming beforehand. This ensures you do not miss out on a claim for small errors.
Ensure you keep the insurer informed of any damage or change in details. This includes changes in name or a relocation.
Don’t worry. It’s very easy.
Step 1: Immediately after a 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.