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Motor Insurance

Home / Motor Insurance

If you had to buy or renew motor insurance a few years back, you would have to fill lengthy forms and undergo a tedious documentation process. With the advent of newer technologies, this process has become paperless and super quick.

Insuretech companies like ACKO allow you to buy/renew motor vehicle insurance online by eliminating mundane tasks such as form-filling and submitting them. Let's take a walk through this new-age way of buying/renewing private vehicle insurance which is more convenient, time-saving and safe.

What is Vehicle Insurance or Motor Insurance?

Meaning

Vehicle Insurance refers to insuring your vehicle against unfortunate and unpredictable incidents. Vehicle insurance is also called motor insurance or auto insurance in the insurance industry. 

Importance

You can buy motor vehicle insurance online and offline from companies authorised by the Insurance Regulatory and Development Authority of India (IRDAI). As per The Motor Vehicles Act, both private and commercial vehicle owners are mandatorily required to insure their vehicles. Not following this rule can lead to monetary penalties and legal issues.

How to Buy?

You can buy or renew vehicle insurance online, which is an easier and quicker way to insure your vehicle. Just visit the insurer’s website (for example, www.acko.com), provide a few details, select your policy and make the payment online. You will get your vehicle policy in your inbox in 2 minutes.

Types of Motor Insurance in India

Vehicles are used for private purposes or commercial purposes. Note that you cannot purchase private vehicle insurance for a commercial vehicle or vice versa. Once you have decided on the category, you have the following motor insurance options.

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Third-party Vehicle Insurance Policy

The Third-party Liability Policy is also referred to as Third-party Plan, Liability-only Policy, and Third-party Cover. The Third-party Vehicle Insurance Policy is a basic plan and is mandatory as per The Motor Vehicles Act. Not owning this basic vehicle insurance plan while driving/riding in India can lead to heavy monetary penalties. The Third-party Policy covers the vehicle owner’s liabilities in case the insured vehicle injures a third party or damages their property. The price of such policies is regulated by IRDAI and is based on the cubic capacity of the vehicle's engine. It is noteworthy that the third-party plan does not offer motor insurance coverage for damages to the insured vehicle.

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Comprehensive Vehicle Insurance Policy

The Comprehensive Vehicle Insurance Policy includes the benefits of a Third-party Vehicle Insurance Policy as well as covers damages to your vehicle in case of an accident, fire, riots, mand-made and natural calamities. The policy also covers vehicle theft. Buying a Comprehensive policy also opens up avenues to purchase add-ons for extra coverage. Since the Comprehensive policy offers enhanced coverage, it costs more than the Third-party policy. Also, if you choose any of the add-ons, it will lead to a proportionate increase in the payable premium. Thus, you must choose only suitable add-ons. Motor insurance companies decide the price of the Comprehensive Vehicle Insurance Policy in India. Hence, prices can vary from insurer to insurer.

Why Should You Buy Vehicle Insurance?

Here are the top reasons to purchase and renew vehicle insurance.

Insuring a vehicle with a basic Third-party insurance plan is a legal requirement. Not following the law of the land can lead to serious consequences such as monetary penalty and/or imprisonment.

2. Financial Safety

Repairing a damaged vehicle can prove costly if the entire amount is paid from your pocket. Having a Comprehensive cover helps to enhance coverage and lends financial assistance to pay the repair bill for the damaged vehicle.

3. Convenience

New-age insurers like ACKO offer value-added services such as pick up and drop facility where they pick up the damaged vehicle, repair it at a garage and drop the vehicle at your doorstep within 3 days.

Importance of vehicle insurance

Vehicle insurance reduces your financial liabilities arising from damages to your vehicle or third-party liabilities. Here are some reasons why wide-ranging motor insurance is essential in India.

It offers financial security in case of damages to your vehicle due to an accident, natural or man-made calamities, fire or explosion.

It takes care of third-party liabilities (financial and legal), including bodily injury to the third party or damages to third party property caused by your vehicle.

It offers peace of mind knowing that motor insurance is mandatory by law. Not insuring your vehicle can invite severe penalties.

It offers coverage in case of the owner’s demise through the mandatory Personal Accident cover (PA). The PA cover not only provides financial protection in case of demise, but it also provides financial coverage in case of disabilities of the vehicle owner.

Motor insurance policy categories in India

Here are the different types of vehicle insurance policies in India.

Private car insurance policy

The Comprehensive private car insurance policy insures your personal or private cars against damages or losses arising from accidents or other mishaps. 

The cost of private car insurance depends on the make and model of the car. The private car insurance policy is classified into a Third-party Liability Plan only or a Third-party Liability Plan and Own Damage cover package. With this type of motor insurance policy, you get benefits such as.

Bike insurance policy

A bike or two-wheeler insurance policy covers motorcycles and scooters. The cost of the bike insurance plan is based on the make and model of the two-wheeler. It can be further classified into a Third-party Liability Plan only or a Third-party Liability Plan and Own Damage cover package.

The bike insurance plan protects two-wheelers against damages or losses caused due to an accident or other mishaps. With this type of wide-ranging motor insurance, you get benefits such as.

Commercial vehicle insurance

Vehicles used for commercial purposes and not for personal or private use are classified under commercial vehicle insurance. Buses, trucks, taxis/cabs, light and heavy commercial vehicles, multi-utility vehicles, ambulances, agricultural vehicles, auto-rickshaws, rental cars and bikes, etc., are some of the vehicles covered under commercial motor insurance.

Here are the benefits of Comprehensive commercial motor insurance.

The cost of commercial vehicle insurance might be slightly higher than private vehicle insurance since they are considered higher risk than personal vehicles.

Features and Benefits of Buying Vehicle Insurance Online

Here’s a table highlighting the top features and benefits of purchasing vehicle insurance online.

Features Benefits
24×7 access Purchase and renew the policy anytime from anywhere.
Convenient process Forget form-filling and tedious documentation work.
Low premium Online insurers like ACKO don't hire any middlemen/agents. Hence, they can offer policies at low premiums as they have a low operational cost.
Smooth processing Online infrastructure helps digital-first insurers to issue policies, settle claims, and service policyholders in a hassle-free way.
Informed decision-making All the necessary information is available on the ACKO's website/mobile app. Also, since there are no intermediaries, policyholders can make an informed decision based on their needs.
Quick renewal Policies can be renewed almost instantly, with the help of just a few clicks.
Satisfying insurance experience Right from researching about plans, buying it, renewing them or making claims, online insurance is more convenient, time-saving and effective.

How to Use a Vehicle Insurance Calculator

A vehicle insurance calculator or a premium calculator helps you get an idea about the premium amount you would be required to pay for the chosen insurance coverage. It is simple to use and is available free of cost. All you have to do is share basic information about your vehicle, choose the required coverage, and you will come to know the approximate cost for the cover. Here are the steps to follow to know the payable premium.

Step 1

Visit www.acko.com or download the mobile app to buy a vehicle insurance policy online.

Step 2

Enter your vehicle (car/bike) details, choose the coverage, and select the suitable add-ons.

Step 3

Once you enter the details, you can view premium amount for the most suitable coverage for your vehicle.

You can modify the optional inputs and get to know the different premium amounts for different covers. Once you are convinced about a particular cover, you can go ahead and purchase the policy. The policy will be available to download as soon as your payment is processed.

Also, read: Vehicle Scrappage Policy in India

Inclusion: What is Covered Under a Vehicle Insurance Policy?

The extent of a private vehicle policy’s cover is dependent on the type of policy purchased. Here are the inclusions of a Third-party and Comprehensive plan. You can refer to the concerned policy’s Policy Wordings for a detailed list of inclusions.

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Inclusions in a Third-party Liability Policy

Here’s a list of inclusions in Third-party Vehicle Insurance Policy:

Third-party Cover: Cover for injuries to a third party or property damage.

Law-abiding Citizen: You shall be considered a law-abiding citizen concerning the mandatory motor insurance requirement.

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Inclusions in a Comprehensive Vehicle Insurance Policy

Here’s a list of inclusions in the Comprehensive Vehicle Insurance Policy:

Third-party Cover: Coverage for injuries to a third party or damages to their property.

Own Damage: Damage to the insured vehicle due to an accident, fire, natural calamities or man-made calamities.

Theft Cover: Insurance cover for the vehicle in case it gets stolen.

Exclusion: What is Not Covered Under a Vehicle Insurance Policy?

Exclusions are situations where the insurer is not liable to settle the claim. Read ahead to know about the exclusions of a Third-party and a Comprehensive plan. You can refer to the concerned policy’s Policy Wordings for a detailed list of exclusions.

Riding/driving with an expired vehicle insurance policy.

Riding/driving in an intoxicated state.

Own damage is excluded in case of a Third-party policy.

Not following driving/traffic rules such as riding/driving with an invalid driving license.

Claiming against an incident that is beyond the policy’s scope of cover.

Accidental damages during war or similar conditions

Cost of repair/replacement of parts that are damaged due to regular wear and tear.

Any claims related to personal items stolen from your car

Add-on Covers Under Vehicle Insurance

There are additional insurance covers for a private vehicle insurance policy that can be purchased by paying an extra premium. Note that you can only buy these additional covers only with a Comprehensive policy and not with a Third-party policy. You can buy most of these add-ons for both two-wheelers and four-wheelers. The premium will vary for every add-ons. Thus, it is crucial to first research before buying. Here’s a list of popular motor insurance add-ons on ACKO.

Zero Depreciation

With this add-on, ACKO will not consider the depreciation charges while settling the claim. As a result, your after-claim pay-out will be more than what it would have been if you didn’t have this cover.

Roadside Assistance

Stranded on the road? Simply call us and our professional vehicle mechanic will rush to your location to help you out with the vehicle’s issues including towing services during car breakdowns.

Consumables Cover

Usually, you have to pay the cost of consumables while repairing the vehicle. ACKO does not cover costs such as usage of oil, nuts and bolts, etc. With this add-on, such costs shall be covered.

Engine Protection

With the Engine Protection Add-on, you can insure your car’s engine against most of the damages such as floods that are not covered in a Comprehensive Plan.

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 kilometers radius of your residence during the policy period. Also, you will get a reimbursement of Rs. 2,500 if the repair takes more than 12 hrs.

No Claim Bonus (NCB) Cover

When you don't raise a claim during the previous policy period, ACKO rewards you in form of an NCB discount on the premium amount during renewal. This discount can go up to 50% if you don't raise a claim for five consecutive years.

Return to Invoice Cover

In case your car is stolen or damaged beyond repair, Return to Invoice add-on cover will help you recover the amount mentioned on the car's invoice value, including the car registration cost and road tax as well.

Personal Accident Cover

Along with a Third-party vehicle insurance plan, it is compulsory to own a Personal Accident Cover in India. This additional cover provides financial protection in the event of permanent disability/death while driving or riding your vehicle.

Personal Belongings - Damage/Theft

While riding, helmets are critical to circumvent injuries to your brain. With this add-on cover, ACKO will cover the repair/replacement cost in case your helmet is stolen or damaged in an accident, fire, man-made or natural calamities.

Personal Accident Cover for Passengers

When you buy this add-on cover along with your Comprehensive car insurance policy, you can secure your near and dear ones in case of permanent disability/death while driving a car. With this add-on cover, you get access to coverage of up to Rs. 1 lakh per passenger.

Eligibility criteria for motor insurance policy

Here are the eligibility criteria to buy a car or bike insurance policy.

The bike/scooter/car should be registered under the vehicle owner’s name.

You should hold a valid vehicle registration certificate.

How to Apply for a Motor Insurance Online?

Here are a few steps to apply for a motor motor insurance online.

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Documents required to buy vehicle insurance

The modern method of buying an insurance policy does not include submitting physical documents. All you have to do is visit www.acko.com or download our mobile application. 

To apply for vehicle insurance online or online motor insurance renewal, you need to share the following details. Once you share the required information, choose the plan and add-ons that suits your needs. Pay the premium amount and insure your vehicle instantly. It’s that simple and easy.

- Car/bike model

- Personal details

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Checking the Vehicle Insurance Policy Status

You can check if your vehicle insurance policy has expired or not. Here are different ways you can find the status of your motor insurance policy.

- You can have a look at your policy document.

- Log into your ACKO account (website/mobile app).

- You can call or email us.

- We also send periodic renewal notifications via SMS and email.

How to Renew Motor Insurance Plan Online

The vehicle insurance renewal process is similar to buying a new vehicle insurance policy. Here’s the process to renew vehicle insurance on ACKO.

Step 1

If you have purchased your previous policy on ACKO, you can modify your policy by logging into your account. If you have purchased from a different insurer and want to renew on ACKO, visit our website or download the mobile app.

Step 2

While renewing your vehicle insurance policy on ACKO, you will have to share and verify details related to your vehicle, previous policy, etc. Select the right plan and add-ons that suits your requirement.

Step 3

Once you have selected the right insurance policy for your car/bike, make an online payment. Once you pay the premium amount, you will receive the policy document in your inbox.

Reasons to buy ACKO motor insurance policy

Here are the top reasons to choose ACKO for motor insurance.

Incredibly low premiums

When you buy motor insurance online from ACKO, you buy it directly from us. There are no middlemen or agents; hence, there are no commissions to agents. We pass these savings on to you through low-cost motor insurance.

Super easy claims

We provide paperless motor insurance claims. We offer a pickup and drop facility for cars in select cities. As per this service, we repair the damaged vehicle and deliver it back to you within 3 days working days. You also get instant claim settlement for minor damages (broken mirror, dent on the fuel tank, etc.) for bikes and cars.

Unique plans and discounts

Apart from tailor-made vehicle insurance plans, ACKO also provides discounts during festivals and special occasions. Through deals, you get to enjoy low-cost motor insurance plans for your vehicle.

How to File a Motor Insurance Claim?

Filing a claim on ACKO is easy and hassle-free. All you have to do is log in to your account via website or mobile app to raise a claim. Here is how the claims are settled on ACKO.

For minor claims, ACKO will instantly reimburse the repair cost. In case of major claims, ACKO will inspect your vehicle. The repair bill will be settled with the garage (except deductibles) if it is a Network Garage. If not, you will have to pay the bill first, then submit the bills to ACKO to get them reimbursed.

In case of theft or third-party losses, the process becomes a bit complex and can involve filing a First Information Report (FIR) with the police. When your vehicle is stolen, you will need a Non-Traceable Certificate from the police to raise a claim. In case of third-party losses, the issue is directed to Motor Accident Claims Tribunal, which decides the compensation amount.

 

Factors That Determine Your Motor Insurance Premium

Here’s a list of factors that play a vital role in determining the vehicle insurance premium of your bike or the car’s Comprehensive Insurance Policy.

Vehicle Details

Details related to the vehicle such as age, engine specifications, etc.

Location Details

Details about the PIN code of your locality.

Claim History

Details related to previous claims associated with the vehicle.

Policy Coverage

The extent of the policy cover including the add-ons, if any.

Insured Declared Value

The higher the Insured Declared Value (IDV), the higher the premium amount.

Deductibles Amount

The higher the amount of the deductibles, the lower the premium amount.

Anti-theft Devices

Installation of anti-theft devices will also have an impact on the premium amount.

No Claim Bonus Discount

No Claim Bonus percentage at the time of vehicle insurance policy renewal impacts the final payable premium.

Insurance Company

New-age digital insurers like ACKO eliminate the need for middlemen, which reduces operating costs. This in turn results in a lower premium amount.

How to Reduce Vehicle Insurance Premium?

Here’s are a few ways that can help you reduce your motor insurance premium.

Select only those add-ons that have the potential to add value to your vehicle’s insurance cover.

Install anti-theft devices and earn a discount on the premium amount.

Purchase a policy from a digital-first insurance company like ACKO to enjoy a lower premium amount.

Renew your policy before it expires, as not doing so can spike the premium.

Raise claims judiciously and keep the No Claim Bonus discount in mind while raising a claim.

Things to consider while buying motor insurance

Consider the following factors while purchasing motor insurance for your vehicle.

Coverage

Analyse if you need third-party liability coverage or comprehensive coverage for your vehicle. It is recommended that you opt for Comprehensive insurance for broader coverage.

Add-on covers

Add-ons are additional insurance to the Comprehensive insurance. It enhances the policy with specific coverage for your vehicle. For broader coverage, you can choose from Zero Depreciation cover, Return to Invoice cover, Roadside Assistance cover, etc. But, we recommend that you select appropriate add-ons that add value to your coverage.

Personal Accident cover (PA)

Ensure you opt for the mandatory PA cover while buying or renewing the policy. It covers you in case of personal accidents.

Claim process

Opt for a digital insurer such as ACKO for a hassle-free claim procedure. Our digital infrastructure lets you raise claims through our website or mobile app. Or, you can call us to register your claim. Minor claims are usually settled within a couple of hours, while major claims are settled in a few days.

Network garages

You must consider the insurer’s network garages so that you have access to them across the country and where you reside.

Zero Depreciation cover

Your vehicle depreciates as soon as it comes out of the showroom. Hence, claim settlements are processed after considering the depreciation. Opting for the Zero Depreciation or Bumper-to-Bumper add-on negates the depreciation factor during claim settlements.

Insured Declared Value (IDV)

The cost of the motor insurance policy is based on the approximate market value of the vehicle. The value of the bike stated in the policy is the IDV. So, in case of a total loss or when the damages are beyond repair, you receive the IDV after deducting depreciation and applicable deductibles. Ensure you choose the right IDV for your vehicle for the right compensation.

Inclusions and exclusions

Ensure you understand the inclusions and exclusions of your motor insurance policy. Knowing the terms and conditions of the policy helps you avoid unwanted surprises during claim settlements.

Premium

Check how the premium is calculated and what factors impact the cost of the insurance plan. Clear any doubts before you buy the plan.

Why is motor insurance mandatory in India?

We often hear or even witness vehicle owners not following traffic rules. The exponential rise in the number of vehicles on Indian roads has only increased the possibility of accidents. Accidents can cause damages to the vehicle and probably injuries or demise of an individual. The aftermath of an accident can dent your savings due to the cost involved towards repairs and third-party liabilities.

With the possibility of accidents and the subsequent financial impact, The Motor Vehicles Act, 1988, states that all motor vehicles should be insured with the Third-party Liability Plan (TP). 

The TP plan offers financial and legal protection against third-party liabilities, including physical injuries or property damage. Motor insurance is mandatory since the Act states that you must hold vehicle documents such as Driver License, Registration Certificate, liability coverage, and PUC certificate while driving on public roads. Not holding these documents can lead to penalties; hence, follow the mandate and stay away from penalties.

FAQs: Motor insurance questions and answers

Frequently Asked Questions about motor/vehicle insurance.

FAQs concerning buying or renewing a motor insurance policy

Are there any eligibility criteria to purchase a motor insurance policy?

As long as you own a vehicle legally, you can purchase a motor insurance policy for it.

What are the different types of vehicle insurance policies available in the Indian market?

The vehicle insurance segment is primarily divided into private and commercial (or) heavy vehicle insurance. The next layer involves selecting either a Third-party Liability policy or a Comprehensive Motor Vehicle Insurance Plan.

What is the basic working model of motor insurance in India?

Vehicle owners purchase policies from certified insurance companies for their vehicles. If the vehicles get damaged, the policyholder raises a claim, the insurer verifies it, and if approved, settles the claim by paying the cost of repairs as per the terms and conditions of the policy. This is the basic working model of motor insurance in India. However, this can differ in special cases like theft or third-party liabilities.

Is it compulsory to insure my car if I use it only on Sundays and drive safely on the highway?

If you are driving a vehicle on public roads, then it must be insured. Not following such a mandate can lead to penalties and legal issues.

How long will the online vehicle insurance policy buying process take?

The online motor insurance policy buying process can be completed under three to five minutes provided you have all the details handy and your smartphone/laptop has a functional internet connection.

How to file a claim against my motor insurance policy?

The first step in filing a claim against a motor insurance policy is to contact your insurer and let them know about the incident for which you want to raise a claim. You can do this by visiting the insurer’s website, by calling them, or by sending an email.

Is it possible to switch to a different insurer as well as a different insurance plan?

Yes, you can choose to avail the services of a different insurer and select another plan while renewing the policy for a smooth transition process. Make sure to spend some time researching about the insurance company and the plan before buying it.


6 Airbags could be mandatory in all cars soon

-17 January 2022

The Centre has approved a draft notification making six airbags mandatory for all cars sold from 1 October 2022. The draft notification follows the Union Minister for Transport Nitin Gadkari’s appeal to car manufacturers to compulsorily provide a minimum of six airbags across all variants and segments. The draft notification seeks comments from the public and other stakeholders on the rule of making it mandatory for all cars to be equipped with a minimum of six airbags. These comments shall be reviewed, and a final notification, with changes, if any, shall be issued to implement the rule. Currently, two airbags are mandatory for all cars. While the rule for the driver-side airbag came into force on 1 July 2019, the co-passenger airbag rule came into effect from 1 January 2022.

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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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