How to buy car insurance in India?

Jan 15, 2021 4 min read
How to buy car insurance in India?

Buy car insurance can be overwhelming amid so many options. Consider these points to get the right deal.

Car insurance is a contract between the vehicle’s owner and insurance company to protect us against any financial loss such as accident, theft, and more. Buying car insurance is a very strategic decision in India. Not only it keeps your car safe against any financial loss, you are also legally bound by RTO to have a valid car insurance while driving the vehicle.

You can purchase motor insurance in just 180 seconds via CarInfo app!

We must consider some points while purchasing car insurance in India and these points are described below in this article:-

Understanding priorities and requirements

Purchasing a car can have risks sometimes. But for living some risks are mandatory.  We should think deeply for few minutes that why we need an insurance.

Considering the brand

When we purchase any four wheeler we consider car's brand. Similarly, we should also consider about car insurance company's brand. Check out the claim disbursement reputation and service of insurance company.

The range of cover

Some people purchase car insurance just for show but some purchase it with the intention of saving money in cases of emergency or accident and meet legal requirements. In most cases, the second option is easy and better. When we purchase wide-ranging cover in the form of a all-inclusive plan, we should not only stick to law but should also ensure the insurance coverage for the points mentioned in the policy.

Extra points in cover

We should purchase add-ons with practical knowledge. We should acknowledge then as small covers that can be linked with the complete plan. Each add-on has its own market value which can differ from one company to another. Thus don't become a shopping spree and select those points which are important in your priority list. Contrarily, insurance bill can give huge shock.

Know the fundamental plan

The binding part of a car insurance policy is also known as the 3rd-party car insurance cover. According to this, the insurer will help if the car damages the 3rd-party person or their property. It also has Personal Accident Policy for the vehicle's owner or driver. This accident policy provides coverage for permanent disability or death due to insured vehicle's accident.

Terms and conditions of policy

Nowadays, insurers are devoted towards simplifying the insurance policy. Due to responsive websites, friendly apps and helpful executives, etc, when it comes to online purchasing or renewing of the car insurance policy, the policy seekers and holders gets less bullied.

Cashless facilities

Cashless means here that we do not have to pay beforehand when it comes to setting claims. The insurer can make the payment directly to the garages they form a network. This wide network between insurer and garages can offer the cashless services more efficiently.


The Insured Declared Value (IDV) of a vehicle is referred to as the car's current market value. The insurers allow us to select the insured car's IDV from a given range. If someone choose lower IDV, the person has to pay lower premium to insure the car as compared to paying more premium with higher IDV.

Compare online

The golden rule for online shopping is to compare car insurance before purchasing. We have to ensure that comparing policies should have similar coverage. We should also consider the insurer's online review and overall service result.

Voluntary deductibles

If we tell the insurance company that we can share the risk of insuring car, the insurer can reduce the premium to compensate. When we volunteer to pay some percentage or amount of the claim and the insurer reduces the premium in return.

Claim settlement

Periodically, the Insurance Regulatory and Development Authority of India (IRDAI) publishes the claim settlement ratio for insurance companies on their website. This is referred to as numbers of claims raised and settled. It is guideline for insurers to settle the claims.

Theft prevention devices

Devices such as alarms, locks, trackers, etc. helps the protection of the car. This also helps in reducing the chances of car theft and also reduce the insurance premium. Install the device which is certified by the Automotive Research Association of India (ARAI).

Insurance offered by dealers

Mostly, car dealers have links with the insurance companies. We can ask about coverage offered by the policy from our car dealers. For changes, we can also opt for insurance provided by insurance company instead of our car dealers.

Policy portability

Usually 'portability' is used in mobile network providers. In this it is referred to as switching between network providers. This same concept is used in car insurance providers. We can switch easy to different insurer if we doesn't like the services or plan offered by them. It is not a lifelong commitment, we can part ways from the insurer while renewing the plan.

Everyone like discounts

Pay less and get more but discount does not apply to 3rd party plans. Discounts are only available on comprehensive plan because rates of 3rd party policies are standardised and it is decided by IRDAI. However, the premium of the policy is decided by the insurance company offering the plan.

Stress free offers for claims

The insurer should not just provide low priced policies but should also provide stress free claims. Every insurance company have different offers for claims and claiming process. Some brands provide services like they pick our cars from our homes, repair them and send them back to our homes within 3 days, conditions applied.

Service result

The insurer should provide customer-friendly service offers. The insurer must see the priorities of the customers. The insurer should support customers while purchasing the plan, answering post-purchase queries or guaranteeing claim settlement, the service results should be high.


Even generous spenders should keep a tight budget for car insurance expenses. A bounded budget will help in purchasing only essential add-ons instead of buying all kinds of coverage.


If something is improved or adapted in the car, we must inform the insurer before-hand. The insurer may inspect the car with modifications if needed. If the insurer is not informed about these improvements before the claiming process, they might reject the claim it is involved to the adapted parts.

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