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Home / Car Insurance
Car Insurance
ACKO Car Insurance
Buying Guide
Car Insurance in India
Car insurance on ACKO
Save costs, comply with law, and stay hassle-free with ACKO’s online car insurance policy.
Stay safe
Car insurance, also called auto or motor insurance, is a simple and effective way to protect your car from unforeseen risks such as accidents, thefts, fire, natural disasters, or third-party liabilities.
Drive legal
Having a valid third-party car insurance is mandatory by law when you are driving a car in India. Having good car insurance is a necessity to protect yourself from financial losses that come along with road accidents.
Just relax
ACKO makes car insurance easy. Choice of coverage, add-ons and discounts to save on premiums - get them all on ACKO. During claims, enjoy our door to door pick-up, repairs and drop services.
Types of car insurance policies on ACKO
Planning to buy a car insurance policy? ACKO provides different types of car insurance policies for your unique needs.
Third-party Cover
Owning third-party car insurance is mandatory while driving a car in India. It protects you against financial liabilities if you damage someone else’s vehicle/property or injure someone in an accident.
Own Damage Cover
Third-party Liability Car Insurance cover will not help if your car gets damaged due to theft, fire, natural disasters, etc. For that, you need to opt for Own Damage Insurance policy along with the Third-party car insurance policy.
Comprehensive - Basic
Comprehensive Car Insurance Cover not just secures you against third-party liability but also provides cover against damages or losses to your car due to accidents, theft, flooding, fire and more. It is advisable to opt for Comprehensive Car Insurance to give optimum protection to your vehicle and reduce financial liabilities.
Comprehensive - Super Saver
Exclusive on ACKO. Enjoy Comprehensive Cover benefits and superior claim experience. During claims, ACKO will pick up your car, repair it at one of our partner garages, and deliver back at no extra cost. Only catch: if you fail to inform ACKO before any claim related repairs, you will have to pay Rs. 5,000 as a deductible.
Zero Depreciation - Basic
Sometimes called the bumper to bumper plan, includes all the benefits of a Comprehensive - Basic plan while additionally covering depreciation costs of parts. Without Zero Depreciation benefits only partial costs of some parts like fibre & plastic parts are covered.
Zero Depreciation - Smart Saver
Exclusive on ACKO. It has all the benefits Zero Depreciation - Basic at a discounted price. Only catch: during a claim, we pay for everything, you just pay ₹5,000 (above IRDAI/Govt. mandated charges) as a deductible. This gives upfront savings to safe drivers who think chances of them filing a claim are less.
Zero Depreciation - Super Saver
Exclusive on ACKO. Enjoy Comprehensive Cover & Zero Depreciation benefits (read more below) and superior claim experience. During claims, ACKO will pick up your car, repair it at one of our partner garages, and deliver back at no extra cost. Only catch: if you fail to inform ACKO before any claim related repairs, you will have to pay Rs. 5,000 as a deductible.
Personal Accident Cover
Personal Accident Cover is not a Car Insurance policy, but an additional cover to your car insurance. It is mandatory by law to own a Personal Accident Cover along with the Third-party Insurance Plan. It covers both permanent disability/death while driving a car.
Key features of ACKO’s online car insurance
| Key Features | ACKO Advantage |
|---|---|
| Premium | Car insurance plans starting at Rs. 2,072 |
| Add-ons | 8 add-ons available to enhance your insurance plan |
| Own Damage policy | Available under Comprehensive Cover |
| Damages to the third party | Covered |
| Personal Accident (PA) cover | Available. Cover of Rs. 15 lakh for permanent disability/death while driving |
| Cashless repairs | Yes |
| Claim Settlement Ratio (CSR) | 94% for FY20-21 |
| Emergency assistance | 24/7 |
| Repairs | 1-hour pickup (for select cities), instant repairs and 3-day doorstep delivery at no extra cost |
| Buying/renewal process | 100% digitally-driven |
Add-ons with ACKO car insurance policy
You can customise your car insurance plan with any of these add-ons to protect your car. They offer additional coverage for extra cost over your base policy while buying/renewing the policy.
Zero Depreciation Cover
Due to the wear and tear of car parts, the value of your car reduces with time. During claims, the insurance company only pays this depreciated value and not the entire value. Best suited for new cars, Zero Depreciation Add-on cover helps you escape depreciation cutbacks and get the full value of car repairs.
Roadside Assistance Cover
Getting stranded on the road with a car that won't start is one of the biggest worries for any driver. With Roadside Assistance add-on you get access to 24x7 emergency roadside assistance, including towing services during car breakdowns.
Key Replacement Cover
Car keys aren’t cheap and the cost can go upwards of Rs. 10,000. With Key Replacement Cover, you can save your money on expenses incurred for replacing a lost, stolen, or damaged key and even a replaced lock, if required.
Outstation Emergency Cover
Outstation Emergency Cover secures you against accidents/breakdowns outside a 100 km radius of your residence during the policy period. Also, enjoy a reimbursement amount (as per policy terms) if the repair time exceeds 12 hrs.
Consumables Cover
The cost of items such as engine oil, gearbox oil, lubricants, nut and bolt, screw, etc. are not covered during claims. Consumables Cover add-on protects you from expenses incurred on these items during an accident. The good part is - all of ACKO’s plans except the Third-party Plan include this coverage at no extra cost.
Engine Protection Cover
Flooding or not using the car for a long time can damage the engine, which is one of the most expensive parts of the car. Car insurance doesn't cover damages to your car engine. However, the Engine Protection add-on cover shields you from losses caused due to damage to your car engine.
No Claim Bonus Protection
When you raise a claim for your car's damages, you lose out on the No Claim Bonus (NCB) discount. NCB Protection add-on cover keeps this discount intact even if you make a claim. With this add-on, you can raise a claim and still enjoy NCB discount of up to 50%.
Return to Invoice Cover
Return to Invoice Cover comes to your rescue in case of theft or damage beyond repair. With Return to Invoice add-on cover, you can claim the complete amount as per the car's invoice value. This amount includes car registration cost and road tax as well.
Personal Accident Cover for Passengers
Personal Accident Cover for Passengers is an extra cover for your near and dear ones. It allows you to protect your loved ones in case of unfortunate accidents leading to permanent disability/death. Under this, you can get access to coverage of up to Rs. 1 lakh per passenger.
Top 3 reasons to choose ACKO for car insurance
We get that you would want to compare car Insurance policies and get the one that has low price, is easy to use, and provides good coverage. And that's exactly why you should pick ACKO!
Incredibly low premiums
When you buy directly from ACKO, we don't have to pay any commissions to agents. We pass these savings to you by giving low premium rates.
Super easy claims
ACKO provides paperless door-to-door claims. Give us a call - we will pick up your car, get it repaired and deliver it back to you within 3 working days.
Unique plans & discounts
ACKO has unique plans tailored to your needs. They are not available anywhere else. We also have personalised discounts for our customers.
What’s not covered in our car insurance policy?
No matter which insurance plan you purchase, some costs are not covered when you buy a car insurance from ACKO. They are listed below.
Accidental damages while driving under the influence of alcohol or intoxicating drugs.
Accidental damages during war or similar conditions.
Any claims against an incident when your insurance policy was not active.
Cost of repair/replacement of parts that are damaged due to regular wear and tear and not related to any incident like accident, theft, fire, flood, etc.
Any claims against an incident where you were driving without a valid driving licence.
Any claims related to personal items stolen from your car.
Our customers love us
Save time, money, and avoid hassle.
An absolutely hassle-free experience with ACKO! Not only are their car insurance prices attractive, their customer care executives are quite knowledgeable too.
Suyash Dixit
Maruti Suzuki Baleno Owner, New Delhi
Bowled over by ACKO’s excellent customer service! The Executives were very helpful and addressed all my queries. Even their policy premium was remarkable.
Taher Ahmed Sayeed
Delhi
From query to delivery, ACKO’s quick Turnaround Time made sure my experience was completely stress-free! Must say that I’m impressed with ACKO.
Rahul Gupta
Delhi
Car insurance FAQs
Questions you may have for ACKO
We hate paperwork as much as you do. Hence, you do not need to submit physical documents and can buy a car insurance policy from ACKO at the tap of a button.
Why should I buy/renew car insurance from ACKO?Top reasons why you should buy/renew your car insurance from ACKO are mentioned below.
Low premiums owing to digital process and no commissions involved
Exclusive plans that you won’t find anywhere else
Great claims service. Claim related repairs managed by ACKO. Doorstep pick-up and drop of your car. 3-day claim settlement turnaround for most claims.
We deliver policy instantly. All online with no paperwork involved.
We are licenced by IRDAI (Registration number 157)
The following risks* are covered under ACKO’s Comprehensive Car Insurance policy:
Third-party liabilities
Damage due to accident
Damage due to fire
Damage due to natural calamities
Car theft
Injuries to the car owner
Note: Please refer to the relevant policy document to look at the complete list of inclusions & exclusions of your policy.
How do I raise a claim when I need to? What information should I provide?You can raise a claim by visiting www.acko.com or by calling us on 1800-266-2256. While raising a claim, you should provide the following information:
Your contact number or the vehicle number
Policy number
Description of the incident and photographs of the vehicle (if possible)
First Information Report (FIR) in case of theft, or damage to any third-party or their property
You will also get a periodic status update on your claims. Also, the process might vary depending upon the nature of the claim.
How are prices offered by ACKO on the lower side?ACKO is truly digital and sells most insurance policies directly to customers like you. This way we don’t have to hire a lot of insurance agents and don’t have to pay any commissions either. We pass these savings to our customers through discounts and offers on premium.
Questions you may have about car insurance
Car insurance protects you from financial losses incurred due to car damages/losses in events such as - accidents, thefts, fire, natural disasters, or third-party liabilities.
In return for a premium, the insurer (in this case ACKO) will pay for the car damages as per the policy’s terms and conditions. Buying car insurance also helps you comply with the law, as insuring your car is a legal requirement in India.
What is the meaning of the term IDV in car insurance?IDV stands for Insured Declared Value. This is the best estimate of the current market value of your car. IDV is important because it is the value you shall receive in case your car is stolen or undergoes total damage.
This is assuming you have an Own Damage/Comprehensive Car Insurance policy for your car. IDV is not valid in the case of a Third-party Car Insurance policy.
How to check car insurance availability?You can check if a car insurance policy is available for your car or not on ACKO by scrolling up at the top of this page and using the premium calculator. If you don’t find the right insurance for your call, do drop us a mail on [email protected] and we will help you out.
How to get a duplicate car insurance policy?You can simply log in to your ACKO account and download your car insurance policy.
How to find my car insurance policy number?Your car insurance policy number is mentioned in your policy document. You can find it by going through your policy document. If you have a problem locating it, you can contact us and we will help you out.
Know more about your policy & premium
In case there is a mistake in your car insurance policy or you wish to change some information, you can contact us and ask for Policy Endorsement. We will go through your request, make the changes in the policy at the earliest and share the revised policy with you.
What If I lose my online policy?If you happen to lose your policy, you can log in to your ACKO account and download the policy from there.
How to calculate car insurance premium?The car insurance premium is calculated based on your car’s manufacturer, its model, the age of the vehicle, your location, the chosen coverage, add-on cover, etc. You do not have to calculate all this manually. We will do that for you. Simply scroll up to the widget, input information, and know your car insurance premium.
Will my premium increase If I choose only one add-on?Most add-ons have an extra cost associated with them, but some add-ons can lead to savings on premium too like Voluntary deductible. You should pick and choose the add-ons depending on what you need your insurance to cover. They usually pack in a lot of benefits at marginally extra cost.
Will the premium reduce if I select a lower Insured Declared Value?Yes, your car insurance premium will reduce if you select a lower Insured Declared Value (IDV). But you should know that you will only get an amount equal to your IDV in case of theft or total damage to your vehicle.
Does car insurance premium get cheaper for a couple?To answer, no. The premium for the car insurance depends on the make and model of the car, car's IDV, type of insurance policy purchased (Third-party or Comprehensive), add-ons purchased, location, car's age, and many more. Being married or unmarried has no bearing on the premium of the car insurance policy in India as of now.
I am married. My spouse has a car insurance policy. Do I also need to buy a car insurance policy?If you drive the same car, then not required. If you drive a different car, it is mandatory to buy at least a Third-party insurance policy to drive your car on the Indian roads.
Know more about claims at ACKO
To claim car insurance, just log in to your ACKO account and click ‘Claim Now’ to initiate the process.
What should be my first action to initiate a claim?To initiate a claim, your first step is to either log in to your ACKO account or contact us.
Is there a need to file a First Information Report (FIR) to raise a claim?In some rare cases like theft of your vehicle, you may need to file an FIR. You are not required to file an FIR if the claim is for minor accidents. It depends from case to case. But don’t worry - our claims team will help you at every step to keep the process as easy as possible.
How much time does it take for a claim to be settled?Most of the claims managed by ACKO’s repair team are settled within 3 working days. For minor claims, we offer instant claim settlement too. Our team tries to settle every claim as soon as possible.
What is the meaning of cashless claims?In cashless claims, the garage bill for car repairs is settled directly between us and the garage. You do not have to get the car repaired from the garage and then apply to us for reimbursement.
Know more about policy coverage
NCB in car insurance means No Claim Bonus. This means you get a discount on car insurance renewal if you have not raised a claim during the previous policy period. It can be viewed as a reward for driving safely and not raising a claim.
How to check the car insurance policy status (active/inactive)?You can check the car insurance status by going through your Policy Document. Your car insurance policy stays active between the policy start date and the expiry date. Both these dates are mentioned in your Policy Document. Make sure to renew your car insurance policy before the expiry date to avoid fines and to continue with your insurance coverage.
What is the meaning of the Zero Depreciation add-on in car insurance?A Zero Depreciation Add-on is extra coverage that you purchase by paying an additional premium. With this add-on, you can avoid depreciation cuts and claim the full value.
What is the meaning of a deductible?A deductible is the amount of money that you will have to pay while settling a claim. The insurance company will bear the rest of the approved amount.
There are two types of deductibles - Compulsory and Voluntary. Under Compulsory Deductible, you will have to pay a nominal amount on every claim. In the case of Voluntary Deductible, you may choose to contribute a certain fixed amount (more than the Compulsory Deductible) in case of claim settlement. Going for a Voluntary Deductible can reduce the car insurance premium.
What is the meaning of exclusion?Exclusion in a car insurance policy means that the situation mentioned under the exclusion section is not covered by the policy. Therefore, if you raise a claim for a situation mentioned as an exclusion, we will not accept the claim application.
What happens if my car has six people's seating capacity but carrying nine persons meets with an accident? Is my insurance company liable to pay a claim?The list of inclusions and exclusions may vary from insurer to insurer. If the damages are a part of inclusions and if you are driving the car as per the law, the insurance company may compensate you. However, it is ideal to go through the policy or check with your insurer.
Will my car insurance cover previous damage?Pre-existing damages means previous damages that occurred before you purchased a policy. In usual cases, your car insurance policy will not cover any previous damages. In fact, your insurer can reject your claim in such cases. Hence, it is recommended to be transparent with your insurer while buying a policy.
Know more about policy purchase & renewals
The process to buy a new car insurance policy and to renew it is similar. You can renew car insurance by scrolling up to the top of the page and using the premium calculation widget/tool.
What are the things to keep in mind while renewing or buying a car insurance policy online?Here’s a list of things that you must keep in mind while renewing a car insurance policy in India.
Analyse your requirements before buying a policy
Go through the Policy Wordings for detailed terms and conditions
Buy only suitable add-ons that will add value to your car insurance cover
Buying or renewing a car insurance policy online via ACKO is a swift affair. If you have all the data handy, it will take less than two minutes to buy or renew your car insurance policy online.
By when will I get my policy document if I buy/renew a car insurance policy online?Unlike the offline process, you do not have to wait for days to receive your car insurance policy from ACKO. Your car insurance policy will be delivered in your registered email id’s inbox within minutes after your payment is processed.
Is it cheaper to buy/renew a car insurance policy online compared to an offline process?As mentioned above, we follow a digital-first approach and a direct-to-consumer model. We don’t have to hire or manage a large army of agents or deal with cumbersome paperwork. Since we can escape hefty commissions paid to the intermediaries, we enjoy low operating costs.
Hence, we can pass on these savings to our customers through discounts and offers on the premium. This ultimately reduces the premium amount that our customers have to pay. Our customers often praise us for low, affordable, and simple pricing structures.
At ACKO, our endeavour is to reduce your premium amount while delivering high-quality services to you.
Need more help?
Have queries related to ACKO’s car insurance policies? Refer to Policy Wordings here: https://www.acko.com/download/ for detailed information or reach out to us via email or phone using the information below.
Email
Write to us at [email protected]
Phone
Call us on 1800 266 2256
How to buy car insurance online from ACKO?
Share details, customise plans, and make the payment - that effortless it is to buy a car insurance policy. Here are 3 simple steps to buy/renew a car insurance policy from ACKO.
Step 1
Scroll to the top of this page and share details such as car number, car model, and insurance policy.
Step 2
Select from various car insurance plans with exclusive tailor-made quotes for you.
Step 3
Select a suitable plan, make the payment, download the policy, and receive it in your inbox.
Important terminologies related to car insurance
Refer to the below section, where we aim to simplify commonly used terminologies related to the Comprehensive Car Insurance policy.
Add-ons
You can strengthen your Comprehensive Car Insurance cover by purchasing add-ons. Add-ons are additional coverages that offer an extra layer of protection to your car.
We offer a wide range of add-ons. You may select one or a combination of them based on your requirement. The more the add-ons, the higher will be the premium.
Note: You can only opt for add-ons with a Comprehensive policy and not with a basic Third-party Liability plan. This is because Third-party Insurance does not cover damages to your car.
Insured Declared Value (IDV)
IDV is the best estimate of the current market value of your car factoring in the age of the vehicle and the natural wear & tear the car would have gone through.
For Own Damage & Comprehensive policies, IDV is important because it is the value you shall receive from us if your car is stolen or is damaged beyond repair.
While buying or renewing your car insurance with ACKO, you get to select the IDV within a set range. The higher the IDV, the higher is your premium.
No Claim Bonus (NCB)
You can avail of NCB discount if you don't file a claim during the previous policy period. You can get this discount while renewing your car insurance policy. NCB increases for each claim-free year up to a maximum of 50%. But if you file a claim, it will get reset to 0%.
NCB Protection add-on prevents this drop to 0%, in case of a single claim instance during your claim-free streak.
Own Damage
There are numerous ways in which your car can get damaged. It can get damaged due to a fire accident, natural calamities, the engine can get affected due to water-logging, and many more reasons. Repairing a damaged car is an expensive affair, and a Comprehensive Car Insurance policy can protect you from spending your hard-earned money on car repairs. The Comprehensive Car Insurance plan covers these damages to your car (own damage) as well as third-party damage.
Voluntary Deductible
In the case of Voluntary Deductible, you may choose to contribute a certain fixed amount in case of a claim settlement. In simple terms, it is the part of the claim amount that will not be paid by ACKO.
Voluntary Deductible is over and above a mandatory nominal amount you have to pay on every claim, also known as Compulsory Deductible.
Going for a Voluntary Deductible can reduce the car insurance premium. But it also means a comparatively lower claim amount from ACKO at the time of claim settlement.
Personal Accident Cover
As per law, it is mandatory to own a Personal Accident cover along with Third-party Insurance plan. A Personal Accident cover of Rs. 15 lakh means that if you suffer permanent disability while driving your car, you will be compensated monetarily as per the terms and conditions. It also covers death.
Hence, we recommend you to combine your car insurance policy with personal accident cover. You need not repurchase it if you already own it.
Liability
If you happen to injure a person walking on the street while driving your car or if you damage someone’s property/vehicle while driving your car, you are liable to compensate the person for the damage. Third-party Car Insurance plan insures you against this liability.
Consumables
While repairing your car, the garage uses items like engine oil, gearbox oil, lubricants, nut and bolt, screw, etc. These are known as Consumables or Consumable Items. While settling a claim, the cost of such items is not covered. Consumable Cover add-on protects you from expenses incurred on these items during an accident.
Inclusions: What’s covered in a car insurance policy offered by ACKO?
You should know what your are paying for. "Inclusions" are all the features & benefits covered in your policy.
To go through the entire list of inclusions & exclusions of your policy, visit the Policy Wordings page to see ACKO's policy wordings.
The gist of what is included in ACKO’s Third-party Liability Car Insurance Policy is :
Damages to a third party person, property or vehicle
It does not include damages to your own car. For comprehensive or full coverage insurance, you may consider Comprehensive Car Insurance Policy.
Here’s what is included in ACKO's Comprehensive Car Insurance policy:
- Damages to a third party person, property or vehicle
- Personal Accident Cover
- Car theft
- Own Damage due to fire, calamities, etc.
- Add-on coverage (as applicable)
Exclusions: What’s not covered in a car insurance policy offered by ACKO?
While it is important to know what is covered in your policy, it is equally important to know what isn't covered.
Things that are not covered in your policy are called "exclusions". Exclusions differ depending on the kind of policy you have purchased. However, there are certain permanent exclusions that will never be covered in an ACKO Car insurance policy.
Here are the permanent exclusions:
- Instances not mentioned in the inclusions of the respective policy
- Damage while driving under the influence of alcohol or intoxicating drugs
- Damage during war or similar conditions
- Damage when your policy is not active
- Damage due to regular servicing and wear and tear expenses
- Damage to tyres, tubes, and engine unless damaged in an accident
- Damage when driving without a valid licence
- Damage from items stolen from your car
Please check respective Policy Wordings for more details.
Car insurance premium calculator
Calculating premium can be a tedious task. However, you do not have to worry, as we will do this task for you. You have to answer a few basic questions during the purchase journey. And you will come to know the car insurance premium within minutes.
You can simply enter the basic information in the car insurance premium calculator (the widget/tool at the top of this page) to know the premium.
Read more about Car Insurance Premium Calculator.
Factors responsible for determining the car insurance premium
The premium that you pay is determined by a host of factors as mentioned below.
Car’s engine capacity
The engine cubic capacity (cc) of your car decides the premium payable on your insurance plan. In simple terms, cc is the volume of the engine’s cylinder. Higher the engine cc, the higher the premium you need to pay.
Insurance coverage
The wider the cover, the costlier the policy. The premium for Third-party Policy will be lower than a Comprehensive Plan. However, the coverage will be limited. A Comprehensive Plan or full coverage car insurance might seem costlier, but it offers more protection to your car.
Insured Declared Value (IDV)
Your car’s market value (also called IDV) set by the insurer determines your premium. IDV is the maximum claim you will get from the insurer. IDV changes due to wear & tear with time. Higher IDV, the higher the premium and vice-versa.
Add-on covers
You can enhance the Comprehensive plan with the aid of add-ons as they add an extra layer of protection to the policy. We offer various add-ons, and you can choose one or a combination of them depending on your requirement. The more add-ons you add, the higher the premium.
Age of the car
For a new car, the cost of replacement of the parts/repairs can be higher. Also, the car's value reduces with wear and tear. So the older the car, the lower its value, which reduces the premium amount.
However, age also makes a car more susceptible to damages. Hence, insurance companies check your car’s health while deciding the premium.
Claims history
If you have higher records of accidents, then the probability of damage is more, which will increase your claims.
Claim's history negatively impacts the premium you have to pay during policy renewal. Claims affect your No Claim Bonus component, and as a result, the premium will be higher.
Deductibles
The deductible is the amount you will have to pay while settling a claim. The insurance company will bear the rest of the approved amount.
Other than the mandatory nominal amount you have to pay on every claim, you can opt to increase your deductibles. The higher the deductibles, the lower the premium charged.
Other factors
The insurance companies decide your premium based on other factors such as your location, fuel, deductibles, security features in your car, etc.
For example, a few areas may demand more premium due to higher traffic congestion. Also, owning a CNG car may attract more premium due to higher maintenance compared to petrol/diesel cars.
Claims process with ACKO
Depending on the kind of plan you have purchased, your preference and the severity of claim; there are different claim options available to you.
Managed claims by ACKO
Just register a claim in a few minutes on ACKO's app or website, and our team will take care of the rest. One of our team members will pick up the car from your address, get it repaired at our partner garage and deliver the car back to you within 3 working days.
Cashless claims
Inform ACKO about the claim before taking your car to a garage. Get the repairs done at the garage on your own. We will settle the repair bill with the garage directly to give you a cashless experience for the approved claim amount.
Instant claim settlement
For minor damages such as a car’s loose bumper or damaged mirror, ACKO provides instant claim settlement. ACKO will immediately transfer the approved claim amount to your account so you can get the repairs done on your own.
Reimbursement claims
In case you wish to get your car repaired at a garage of your choice, just inform ACKO first. Our team will arrange for an inspection, and you can carry out the repairs and pay at the garage. You can file for a reimbursement later, and ACKO will deposit the approved settlement amount to your account.
Third-party Policy vs. Comprehensive Policy
We have covered in detail how the two policies differ here: Differences between Third-party and Comprehensive Car Insurance.
Below is a quick snapshot of key differences between the two to help you decide which policy provides the right coverage for your car.
| Points | Third-Party Liability Policy | Comprehensive Policy |
|---|---|---|
| What does this type of policy cover? | It covers injury to third parties and damages to their property/vehicle. Say, if the insured car injures a pedestrian walking on the footpath, this policy will cover the charges for treating those injuries. It does not cover damage to your car or damage/loss due to permanent disability/death. In that case, you may buy a Personal Accident Cover (optional) which insures you against permanent disabilities/death while driving. | It covers third-party liabilities, and Own Damage Cover. This means you are covered for the damages/losses to your car due to fire, flooding, theft, etc. To further enhance your insurance plan, it is recommended to also opt for a Personal Accident Cover. |
| Benefit | This cover ensures that you comply with the law and save the penalty of Rs. 2,000. | This cover ensures that you comply with the law and save your money on car repairs in events such as an accident, theft, fire, or natural disaster. |
| Disadvantages | The disadvantages of this policy are its limitations. It only offers basic Liability Coverage. It does not cover damages to your car. | Because of wider coverage (Third-party Insurance plan plus damages to your car), it is costlier as compared to a Third-party Insurance Plan. |
| Personalisation | It is not possible to customise this plan. | You can personalise this plan with the help of four primary points: Insured Declared Value (IDV), Voluntary Deductible, Security Devices such as anti-theft devices, and add-ons. |
What happens if your car insurance expires?
You should try your best renew your car insurance in time, and never let it expire.
Driving without valid Insurance is illegal in India and can attract heavy penalties.
You lose out on your No Claim Bonus if you fail to renew the policy within 90 days after your policy expires.
If any incident like accident or theft occurs while your insurance is lapsed, it won't be covered by insurance.
Insurance prices usually see an increase each year. A delay in renewals might cause an increase in premium rates for you.
The need for car insurance in India
As per the report by Insurance Information Bureau (IIB), approximately 23 crore vehicles were running on the Indian roads as of 31st March 2019. While India ranked fourth across the globe with respect to the vehicles manufactured in 2019, the bike and car insurance penetration showed signs of worry. Out of 23 crore vehicles in the country, 57% were uninsured. If we do a quick calculation, approx. 13 crore Indian vehicles did not even have a mandatory Third-party insurance policy. Here are a few more reasons why insurance for cars/bikes is necessary in our country.
Increase in car and bike thefts
In 2019, close to 2.4 lakh car and bike thefts were reported in the country as per the report released by National Crime Records Bureau (NCRB).
This is a Compound Annual Growth Rate (CAGR) of close to 2% over the last 3 years. This means 105 vehicles were stolen out of every 1 lakh vehicle in India, with only 25% getting recovered later.
Hence, it is increasingly important to insure your car with Comprehensive Car Insurance to avoid financial loss in case of theft. If we further dissect this data statewise, 11 states contributed to 70% of vehicle thefts in India.
Rising number of road accidents
In 2019, our country reported close to 4.4 lakh road accidents as per the NCRB report. That is a perturbing number of approx. 191 road accidents per 1 lakh vehicles in India. In these accidents, around 1.54 lakh people died and close ~4.4 lakh people reported injuries.
As per the chart, there has been a steady decrease in road accidents since 2015. However, that’s not enough recovery, as India ranked third in the world when it came to the number of road accidents in 2018.
A glimpse into the auto insurance industry in India
Growth in Gross Direct Premium (GDP)
The Indian auto insurance business registered a growth of close to 8.9% in FY18-19 and close to 7.2% in FY19-20. In FY18-19, the share of the auto insurance business in terms of Gross Direct Premium was 38% of India’s total general insurance business.
States contributing maximum growth
As per the report by IIB, this growth comes from 6 states i.e Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu, Gujarat and Delhi, which contributed close to 50% of the total policies and claims.
Contribution to non-life insurance premium
Gross Direct Premium increased from Rs. 59,246 crores in FY17-18 to Rs. 69,208 crores in FY19-20. For FY20-21, the market share of the motor insurance premium stands at approx. 34% of the overall non-life insurance premium.
Motor insurance GDP contribution to overall non-life GDP
| Year | GDP (in crores) | Motor: GDP (in crores) | % |
|---|---|---|---|
| FY17-18 | Rs. 1,50,662 | Rs. 59,246 | 39% |
| FY18-19 | Rs. 1,69,448 | Rs. 64,522 | 38% |
| FY19-20 | Rs. 1,88,907 | Rs. 68,951 | 37% |
| FY20-21 | Rs. 1,98,739 | Rs. 67,790 | 34% |
Source: Insurance Information Bureau of India
Under penetration of auto insurance products
For FY18-19, the total number of vehicles on the Indian roads was approx. 23 crores. Only 43% were insured. While 66% of two-wheelers remained uninsured (up from 62% in FY16-17), the private car uninsured proportion stood at 11% (up from 7% in FY16-17). There is still a big market underserved, making India a lucrative destination for innovative car insurance products.
Total vehicle uninsured population
For FY18-19, the total number of vehicles on the Indian roads was approx. 23 crores. Only 43% were insured. While 66% of two-wheelers remained uninsured (up from 62% in FY16-17), the private car uninsured proportion stood at 11% (up from 7% in FY16-17).
Uninsured proportion in Indian states
There were 21 states/union territories where the uninsured rate was more than 50%. Meghalaya topped the list with 86% uninsured vehicles, whereas Kerala performed comparatively better with just 17% uninsured cars and bikes in the state. 11 major states registered an uninsured proportion of more than 50%.
Crystal ball gazing into the growth of the motor insurance industry
The industry is all set to grow as digital adoption and personalised offerings become the North Star of the auto insurance industry.
Internet penetration
As per the data from Statista, internet users in India rose from 422 mn in 2017 to 761 mn by 2021, which is a compounded annual growth rate of 15.9%. This number is projected to reach approx. 974 mn by 2025. The internet penetration and a young demographic dividend will influence the growth of digital auto insurance products in India.
Foreign Direct Investment (FDI) inflows
FDI inflows stood at Rs. 26,000 crore (US$3.58 bn) since 2015. Asset under management (AUM) in the insurance sector increased by 76% over the last five years. The recent increase in FDI inflow from 49% to 74% in the insurance sector will likely propel new innovative offerings and strengthen the insurance penetration in India.
Growth in the automotive industry
Strong growth in the automotive industry and the spike in auto sales will propel the growth of auto insurance in India over the next decade. Between FY14-15 and FY18-19, the automobile domestic sales registered an average growth of 5.8% y-o-y.
Demographic dividend
With approx. 400 mn millennials and their soaring aspirations, the opportunities are humongous for auto insurance companies to acquire new customers.
Financial ecosystem
India’s strong macro-economic factors and a robust financial ecosystem make India an attractive hubspot for motor insurance products.
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CIN: U66000KA2016PLC138288
IRDAI Registration No: 157
Category: Non-Life Insurance
The use of images and brands are only for the purpose of indication and illustration. ACKO claims no rights on the IP rights of any third parties. The ratings are derived from reviews and feedback received from Google and Facebook users on their respective platforms. | *Savings of upto Rs. 50,000 have been calculated on the IDV of Rs. 18,00,000 and 0% NCB. Amount saved is in comparison to tariff rates. Product name: Private Car Policy - Bundled | UIN: IRDAN157RP0014V01201819 |
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