What is car insurance policy?

What is car insurance policy?

Car insurance is a legal contract between the insurance company and the car owner that protects you if your vehicle is damaged or stolen.

Motor Vehicles Act, 1988 makes it mandatory for you to have a third-party liability policy, and it is prudent on your part to have Own-damage coverage. The combination of the two is called Motor Comprehensive policy, which is the advisable insurance cover.

Stats say that 54 road accidents occur every hour in India!

Why car insurance policy is important?

Your car can get damaged, destroyed, or stolen. In such a situation, insurance is the financial safety net to repair or replace the vehicle.

• Hospital bills: If the owner-driver is injured in an accident, your insurance can make payments towards medical expenses.

• Compensation for injuries and disability: If the driver dies due to the accident, the car insurance company will pay a fixed compensation amount to their dependents.

Types of Car Insurance

There are mainly three types of car insurance policies available in India. Each type offers a different level of protection based on your needs and legal requirements.

• Third-party car insurance: This policy is compulsory under the law and covers the accidental damages caused by the policyholder’s vehicle to a third-party vehicle or property or injury to or death of a third party. It also deals with any legal proceedings and claims.

• Comprehensive car insurance: Comprehensive car insurance policy combines both Third-party liability and OD (Own damage - gives coverage for the own-damages sustained by the insured bike due to an accident).

Add-on Covers in Car Insurance

Add-on covers are optional benefits that you can include in your car insurance policy by paying an additional premium. These covers offer extended protection and help reduce out-of-pocket expenses during accidents, repairs, or emergencies. While not mandatory, they provide valuable support in real-life situations and can make your insurance policy more useful and comprehensive.

• Consumables Cover Covers the cost of replacing consumables like brake oil, engine oil, grease, and lubricants after an accident.

• Engine Protection Cover Covers damage to the engine and gearbox, especially due to water ingression or oil leaks.

• Personal Accident Cover for Driver Offers financial security to the driver or their dependents in case of injury or death due to an accident.

• Daily Allowance Cover (Unlimited Earning Potential) Provides a daily travel allowance when the car is in the garage for more than 3 days.

• No Claim Bonus (NCB) Gives a premium discount on renewal if there were no claims made during the policy year.

• Key Protection Cover Pays for the replacement of car keys and locks in case of theft or loss.

Documents Required for Car Insurance

Here is a list of documents needed for an individual to buy or renew a Car Insurance policy.

To buy a new policy:

• Car Purchase Invoice copy

• Proposal form with details

• PAN and Aadhaar Card Copy (KYC Verification)

To renew the policy:

• Proposal form with details

• Copy of Registration Certificate (RC) of the vehicle

• Previous Insurance Copy

• PAN and Aadhaar Card Copy (KYC Verification)

What are Deductibles in a Car Insurance?

Deductibles are a cost-sharing agreement between you and the insurance company, where a portion of the car insurance claim must be paid by you.

• Compulsory Deductible: In every claim, you are required to pay a fixed amount set by the insurance company. This is mandatory and cannot be waived.

• Voluntary Deductible: You can choose to pay an additional amount from every claim in exchange for a discount on your insurance premium. This is optional and applies over and above the compulsory deductible.

Car Insurance Claim Exclusions

You cannot make a claim under the following conditions:

• If your car insurance policy has expired

• When the car is used outside India

• If the damage is caused by war or any nuclear activity

• In case of an electrical or mechanical breakdown

• If the driver has consumed alcohol or drugs

• When the driver does not have a valid driving license

• If the car is used for illegal activities

How to Buy Car Insurance?

Fincover helps you find the best car insurance policies available in the market. Our “Compare and Buy” feature makes it easy to select the most suitable plan for your needs. Just follow these steps:

1. Log on to www.fincover.com

2. Enter your vehicle registration number

3. Select your car model

4. Choose “Buy Insurance” or “Renew Insurance”

5. Browse the insurance options displayed from various companies

6. Analyze and select the best policy that fits your needs

7. Pay the premium using your preferred payment method

8. Check your registered email for confirmation and download the policy document

FAQ

You can learn more from our frequently asked questions.

1. How to choose the best car insurance policy?

Fincover helps you compare policies from multiple insurers. You can check premiums, coverage, add-ons, and claim processes — all in one place. This helps you choose a policy that best suits your needs and budget.

2. Should a car insurance policy be renewed?

Yes! Every car insurance policy must be renewed before it expires to remain valid. Fincover makes renewal easy with secure online payment options. You can also track your renewal date and policy details in your Fincover user profile.

3. How can one save on the premium amount?

Fincover allows you to compare policies and features. By evaluating the benefits and choosing only what you need, you can buy the best plan at the most competitive rate.

4. How many times can a policyholder make a claim using a 4-wheeler insurance policy?

The number of claims depends on the insurer and policy terms. Most insurers allow multiple claims unless the total claim amount exceeds the Insured Declared Value (IDV). Always check the policy document for specific claim limits.

5. Can I claim bills for services done at a non-network garage?

Yes. You can claim through the reimbursement process. You’ll need to pay upfront, then submit the bills and documents. After verification, the insurer will reimburse the approved claim amount.

6. Can I own multiple policies for my car?

Technically yes, but Fincover does not recommend it. Instead, you can choose useful add-on covers with your existing policy to enjoy full benefits without managing multiple policies.