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Home / Motor Insurance
What is Vehicle Insurance
Vehicle insurance, also known as motor insurance, is a policy that protects your car, two-wheeler, commercial vehicle (such as trucks, buses, or autorickshaws), or electric vehicle against financial loss from accidents, fire, theft, and natural disasters. Under the Motor Vehicles Act, every vehicle in India must carry at least third-party insurance, which covers injury or damage your vehicle causes to others, while a comprehensive policy additionally protects your own vehicle. You can compare plans and buy or renew a policy online in minutes.
Types of Vehicle Insurance in India
The different types of vehicle insurance policy in India are as follows:
Car Insurance
Car insurance is an insurance policy that offers coverage against damage to your car caused by accidents, fire, theft or any natural calamities. It also covers third-party (TP) liabilities caused in an accident involving the insured car. While purchasing a third-party liability policy is mandatory by law, opting for own-damage cover or a comprehensive car insurance policy ensures complete financial protection for your vehicle.
Two Wheeler Insurance
Two wheeler insurance or bike insurance provides financial and legal protection to all types of two-wheelers, including bikes, scooters, mopeds, and sports bikes. It covers two-wheelers against own damages such as accidents, fire, theft, etc. Additionally, it includes any accidental loss caused to the third party or property. Similar to car insurance, purchasing third-party cover is mandatory by law, while own-damage cover remains optional for comprehensive protection.
Commercial Vehicle Insurance
Commercial vehicle insurance is an insurance policy that covers commercial vehicles like trucks, buses, etc. The coverage is similar to car/bike insurance. It covers accidental damages to the insured vehicle and third-party liabilities. All commercial vehicles must have at least a third-party liability policy to comply with the law.
Electric Car Insurance
Electric car insurance, as the name suggests, provides financial protection to your electric vehicle in case of any unforeseen events like accidents, thefts, natural disasters, etc. In India, a third-party electric car insurance policy is compulsory, like all the other types of motor insurance. To protect your favourite EV, do not forget to get an Electric Car Insurance policy.
Types of Motor Insurance Policy in India
The different types of motor insurance policies available in India are as follows:
Third-Party Motor Insurance Policy
A Third-party Liability Vehicle Insurance Policy covers financial liabilities if the insured vehicle accidentally damages other people's property or causes injuries/death to a third party. A third-party insurance policy is mandatory as per law; however, it does not cover damages to the vehicle.
Comprehensive Motor Insurance Policy
The Comprehensive motor insurance policy provides all the coverage benefits of the Third Party Plan, on top of covering damages to the vehicle caused by accidents, calamities, fire, rat bites, and theft of the insured vehicle. This policy can also be enhanced with add-on covers or top-ups to get better coverage.
Own Damage Cover Policy
An Own Damage Car Insurance policy covers the cost of repairs or losses to your insured vehicle caused by accidents, fire, theft, natural or man-made calamities, and other unforeseen events. This policy provides financial protection for damages to your own car, which are not covered under a Third-Party Liability policy.
While Third-Party insurance is legally mandatory, opting for an Own Damage cover (or a Comprehensive Policy that includes both) is advisable to ensure complete protection for your vehicle and finances.
Difference Between Third-party, OD, and Comprehensive Policy
In the table below, let’s take you through the differences between third-party, OD, and Comprehensive policy:
| Parametres | Third-party | Own-damage | Comprehensive |
|---|---|---|---|
| Third-party Cover | Yes | No | Yes |
| OD cover | No | Yes | Yes |
| Premium | Mandated by IRDAI | Lesser than Comprehensive | Higher premium |
| Fire damage | No | Yes | Yes |
| Thefts | No | Yes | Yes |
| Add-ons | No | No | Yes |
Motor Insurance Coverage Inclusions/Exclusions
Vehicle insurance comes with several coverage benefits, depending on the policy you choose. The following are the coverage details of a Comprehensive Motor Insurance Policy. You can refer to the concerned policy’s Policy Wordings for a detailed list of inclusions and exclusions.
What’s Covered?
What’s not Covered?
Inclusions in the Motor Insurance Policy by ACKO
✅ 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.
✅ Natural Disasters: Damage due to earthquakes, floods, cyclones, landslides, etc.
✅ In-transit Damage: Any damage to the vehicle during transit
Exclusions in the Motor Insurance Policy by ACKO
❌ Own damage is excluded in case of a Third-Party Policy.
❌ Damages to your vehicle when riding/driving in an intoxicated state.
❌ Damages to your vehicle when riding/driving with an expired vehicle insurance policy.
❌ Damages to your vehicle when riding/driving with an invalid Driving Licence.
❌ Cost of repair/replacement of parts that are damaged due to regular wear and tear.
❌ Any claims related to personal items stolen from your vehicle.
How to Buy Vehicle Insurance Online from ACKO
Here are the steps to buy motor insurance online.
Step 1: Scroll to the top of this website, or locate the floating button “Check Prices”
Step 2: Provide your personal and vehicle details (phone, registration number)
Step 3: Select the vehicle insurance plan and add-ons.
Step 4: Pay the insurance premium and get your vehicle insurance online instantly.
Documents Required to Buy / Renew Motor Insurance
The process of buying or renewing motor insurance from ACKO is a paperless one. All that is needed is some information about:
Vehicle Registration Certificate (RC): name of the vehicle owner, make/model/variant, engine number, chassis number, engine CC, and fuel type.
Details of the current policy (in case of renewal): Name of the current insurer, Policy number, No Claim Bonus (NCB), and any add-ons.
KYC (proof of identification & address proof): PAN / Aadhaar / Driving License / Voter ID / Passport / Form 16.
How to Renew Vehicle Insurance Online
The vehicle insurance renewal process is similar to buying a new policy. Here's how to renew on ACKO:
Step 1
If your existing policy is with ACKO, log into your account to modify it. If you bought from a different insurer, visit our website or download the ACKO app.
Step 2
Provide and verify your vehicle details and previous insurance details. Select the right plan and add-ons.
Step 3
Pay the premium, and you'll receive the policy document in your inbox.
Why Should You Buy Motor Insurance?
Vehicle insurance is mandatory in India as per law. The exponential rise in the number of vehicles on Indian roads has only increased the possibility of accidents, which can cause damage to the vehicle and injuries or the demise of an individual. The aftermath of an accident can dent your savings due to the cost involved towards repairs and third-party liabilities. The Motor Vehicles Act, 1988 states that all motor vehicles should be insured with at least a Third-party Liability Plan. Here are the top reasons to buy motor vehicle insurance:
Offers Third-Party Liability Coverage: Buying motor vehicle insurance provides you with third-party liability coverage. It covers you against damages to third-party property or injury or death of a third party caused due to your vehicle. This coverage saves you from legal hassles and financial losses.
Provides Financial Backup: If you opt for an own-damage or Comprehensive Vehicle Insurance, you will get financial protection if your vehicle suffers damage due to accidents, natural disasters, vehicle theft and total loss. Hence, vehicle insurance can be your saviour if your vehicle is stolen or damaged significantly due to such unforeseen circumstances.
Provides Personal Accident Cover: It is mandatory to purchase Personal Accident (PA) cover when purchasing vehicle insurance. It provides coverage of up to ₹15 lakhs against accidental injuries, disability or death of the vehicle owner, offering crucial financial support during such unfortunate events. If an optional personal accident (PA) cover for the co-passenger is taken, an additional premium would have to be paid. Up to a limit of 2 lac rupees PA cover can be chosen if the traveller opts for.
Helps You Meet Legal Requirements: Having at least third-party vehicle insurance is mandatory by law in India under the Motor Vehicles Act. Driving without valid insurance has been made a punishable offence under Motor Vehicles (Amendment) Act, 2019. The first instance can attract a fine of ₹2, 000 and the second one ₹4, 000 and in a worst case scenario may put a driver in jail up to 3 months. Vehicle insurance ensures you stay legally compliant while on the road.
Cashless Repairs: ACKO's vehicle insurance policies offer cashless repair services at network garages. This means you don't have to pay for repairs upfront, as we will settle the claim directly with the garage, making the repair process convenient and hassle-free.
Benefits & Features of Buying Vehicle Insurance from ACKO
Buying or renewing your vehicle insurance online with ACKO comes with several key features and benefits:
Affordable premiums: ACKO brings affordable motor insurance policies at discounts of up to 85% without any compromise on insurance coverage. There is no middleman, keeping operation costs to a minimum and this is reflected in low premium prices.
Network garages: Cashless repair services are available at more than 5, 000 garage chains in India, so that you do not have to make an advance payment for repairs.
Buy or renew in 2 minutes: Everything from purchasing a motor insurance policy to getting the renewal done and making the claim is a digitally-first process. The ACKO app and its online portal are used for all services. Ditch the form-filling and all the paperwork!
instant renewal: You can continue to be covered without any break by instantly renewing your motor insurance on the ACKO app or the website.
Quick claim settlements: ACKO's digital claims process makes sure your claims are handled quickly and efficiently.
24/7 support: From claims-related matters to other inquiries, our support team is there to help you anytime day or night.
Transparency: As all policy details, along with pricing comparison is given in ACKO's website/app and since they do not involve any intermediaries, consumers are empowered to base their buying decision purely on product suitability and their own requirements.
Add-on Covers Under Vehicle Insurance
Add-ons are additional insurance covers that can be purchased by paying a premium. Note that you can buy these additional covers only with a Comprehensive policy and not with a Third-party policy. Here’s a list of popular motor insurance policy 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 payout 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 kilometres radius of your residence during the policy period.
No Claim Bonus (NCB) Cover
When you don't raise a claim during the previous policy period, ACKO rewards you with an NCB discount on the premium amount during your vehicle insurance 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, the 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 crucial in preventing brain injuries. 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.
How to File a Motor Insurance Claim with ACKO
Filing a claim on ACKO is easy and hassle-free. All you have to do is log in to your account via the website or mobile app to raise a claim. Here is how the claims are settled on ACKO.
Step 1 - Log in to your ACKO profile using your mobile number.
Step 2 - Open your motor insurance policy and click on “Register a claim”.
Step 3 - Enter the necessary details and upload all claim-related documents (as required).
Documents Required to File a Motor Insurance Claim
For processing your motor insurance claim smoothly, make sure that you have the following ready with you:
Claim form duly signed and filled up
Photocopy of the Registration Certificate of the insured motor vehicle
Driver’s license of the owner driver
Final bill and receipt of payment
Photocopy of the FIR of the Police Station (if necessary in case of theft, injury or death of any third party or severe damages)
Motor Vehicle Insurance Rules & IRDAI Updates
Premiums for third-party liability insurance are mandated by the IRDAI and are consistent throughout all insurers and cannot be reduced. The premium for own-damage insurance, add-on, and NCB can vary among insurers.
Base third-party premium (one year policy) as per IRDAI:
Private car (engine less than 1000 cc): ₹2,094
Two-wheeler (engine less than 75cc): ₹538
Private car (engine between 1000-1500cc): ₹3,416 · (more than 1500cc): ₹7,897
Regulatory norms for insurance:
A third-party cover for 3 years is mandatory for new cars, while 5 years for new bikes (IRDAI 2018, retained).
Own Damage Cover can be taken for 1 year standalone (IRDAI 2020).
The NCB (No Claim Bonus) is standardised by IRDAI in a 20%–50% range.
Electric vehicles receive a 15% discount on the third-party premium.
Factors That Affect Your Vehicle Insurance Premium & How to Reduce It
Here are the factors that determine your vehicle insurance premium, followed by ways to reduce it.
Factors that affect your premium:
Vehicle Details: Age, engine specifications, make and model of the vehicle.
Location Details: The PIN code of your locality (metro/high-risk areas cost more).
Claim History: Previous claims associated with the vehicle.
Policy Coverage: The extent of the cover, including any add-ons.
Insured Declared Value (IDV): The higher the IDV, the higher the premium.
Deductibles: The higher the deductible, the lower the premium.
Anti-theft Devices: Approved anti-theft devices lower the premium.
No Claim Bonus (NCB): Your NCB percentage at renewal reduces the payable premium.
Insurance Company: Digital insurers like ACKO eliminate middlemen, reducing operating costs and premiums.
How to reduce your premium:
Choose your add-ons wisely — only essential ones that add real value.
Buy from a digital-first insurer like ACKO for lower premiums.
Maintain your No Claim Bonus by avoiding claims for minor damages.
Install approved anti-theft devices for a premium discount.
Renew on time, before your policy expires, to avoid premium increases.
Compare policies online to find the best coverage at competitive premiums.
Opt for a higher voluntary deductible to lower your premium.
Maintain a good driving record with no challans or accidents.
Things to Consider While Buying Vehicle Insurance
Consider the following factors while purchasing a motor insurance policy 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.
Premiums
Understand how the premium is calculated and what factors influence the cost, including vehicle make and model, age, registration location, and your driving history. Compare quotes from different insurers to find the best coverage at competitive rates.
Add-on Covers
For broader insurance 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.
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.
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 IDV represents your vehicle's current market value and determines the maximum claim amount in case of total loss or theft. Ensure you select an appropriate IDV - not too high to inflate premiums, nor too low to receive inadequate compensation during claims.
Policy 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.
Frequently Asked Questions on Vehicle Insurance
FAQs about motor vehicle insurance.
Which type of vehicle insurance is best?
A Comprehensive Car Insurance policy is the best vehicle insurance policy.
What are the types of motor insurance?
There are altogether three categories of car insurance plans available that are: Third-Party Liability Insurance (this one is required by law), Standalone Own-Damage Insurance, and the Comprehensive Insurance plan, which offers both third-party and own damage insurance covers combined. Compulsory Personal Accident (PA) insurance cover is also a part of motor insurance.
What is motor insurance, and what are its benefits?
Motor insurance is an insurance plan that provides insurance coverage for your vehicle. The main benefits of motor insurance are backup against financial losses and legal liabilities.
Is it mandatory to get insurance for your vehicle?
Yes, car insurance is mandatory in India, atleast third party insurance is minimum. If being found driving an uninsured vehicle is ₹2, 000 for the first offence and up to ₹4, 000 for the second, and can also result in imprisonment for a period not exceeding 3 months under the Motor Vehicles (Amendment) Act, 2019.
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.
How long will the online vehicle insurance policy buying process take?
The online motor insurance buying process can be completed in as little as 2–5 minutes, provided you have your vehicle details handy and a working 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.
What is IDV in vehicle insurance?
IDV in vehicle insurance stands for Insured Declared Value and represents its exact market value. It is the maximum amount the insurer will pay in case of total loss or theft of your vehicle.
What is cashless vehicle insurance?
Cashless vehicle insurance lets you get your vehicle repaired at a network garage without paying out of pocket. ACKO settles the bill directly with the garage. ACKO offers cashless repairs at 5,000+ network garages across India.
How is the motor insurance premium calculated?
Own Damage Premium will depend on your car’s IDV, CC, age, make/model, region of registration, No Claim Bonus, and additional coverages opted for. Third Party Cover remains constant as per IRDAI regulations.
What is the period/validity of a motor insurance policy?
Comprehensive and own-damage policies are usually issued for 1 year. New cars require a 3-year third-party cover and new bikes a 5-year third-party cover, as mandated by IRDAI.
What happens to my motor insurance if I sell my vehicle?
If you sell your vehicle, the insurance policy is transferred to the buyer’s name. The buyer needs to transfer the policy within the prescribed period along with the transfer of RC. But the No Claim Bonus will still remain yours, and you can transfer it to your next vehicle.
What if I don't have a valid motor insurance policy?
Driving without proper insurance is not legal. The penalty associated with this offence is ₹2,000 for the first offence, and a maximum of ₹4,000 for the second offence. The punishment also involves jail time of up to 3 months.
What is a deductible in a motor insurance policy?
Deductible means the amount paid by you out of your pocket prior to the remaining payment made by the insurer. The compulsory deductible is decided by IRDAI, while the voluntary deductible is one that you choose.
Written by
Nikhila PS
Senior Content Editor
Nikhila is a content creator with 6+ years in EdTech and motor insurance, turning complex policies into clear, engaging content. She enjoys exploring digital trends, social media, and art while planning her next short escape.
Reviewed by
Rekhit Singh Kaushal
Senior Director - Motor Underwriting
Rekhit Singh Kaushal is Senior Director at ACKO, a leading digital motor insurance provider in India. With deep expertise in insurance strategy and innovation, he brings trusted insights on car and bike insurance to help drivers stay protected.
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