5 Ways to Compare Car Insurance Policy

With a number of cars running on Indian roads increasing at an alarming rate, the possibilities of the road accidents are also increasing. It, therefore, becomes inevitable to insure your car by choosing the best plan that offers maximum benefits with reasonable premiums.

Unless you are completely aware of the popular insurance policies, choosing the vehicle insurance can be full of hassles. You might also get confused on whether you should renew the insurance from the same company or check other available options. It is always advisable to compare car insurance policies as you may enjoy more benefits due to the competitive market. The benefits can be in the form of additional features or cheaper premiums.

If you are confused on how to compare car insurance policies, these pointers will help you out.

Types of Car insurance

Two major types of car insurance include:

Third Party Liability: In simple words, it is a type in which insurance is covered for the injuries caused by an individual to the third party but not himself/herself. As per the Indian judicial system, it is mandatory in India to have a valid third party insurance.

Comprehensive Insurance: Also known as standard motor insurance, this covers both damages to the first party (insured) and the third party due to an accident. The insured individual also receives cover for the car from theft or damage due to disasters like earthquake, cyclone, or some other tragic event.

Apart from these categories of insurance, every insurer has its own variants of car insurance. These vary on the basis of what’s covered under the insurance.

For example, an insurer may offer personal accident cover for owner/driver in a basic plan, whereas coverage for co-passengers and roadside assistance may also be included in a premium plan.

Premium Offered by Company

To evaluate the premiums online, choose an insurance web aggregator website to receive an unbiased comparison. You must also keep in mind various factors that may further affect the premium. The information of car like manufacturer, model, category, fuel-type, and number of kilometers affect the premium. The experience, profession and age of the driver are also considered while calculating the premium. The premium is also directly proportional to the coverage level you want.

The increase in the coverage options increase the premiums offered by the companies.

Add-Ons: Different insurance providers have different add-ons when it comes to car insurance. Few companies may offer some additional features without extra cost, but you have to pay additional money to most of the insurers to avail these additional benefits. Some car insurance companies offer add-on cover in the form of compensation in case of death or permanent disability due to an accident. Nil-depreciation insurance is one popular policy that covers claim for plastic and rubber parts. A lot of car owners save their repair bills with this cover. Some insurance firms also offer cover for the ambulance charges that individuals have to pay during an accident. Various insurers let their individuals redeem free add-ons only if they renew their existing plan.

Minimum and maximum IDV: Insurance declared value (IDV) is the maximum amount that can be claimed from the insurer in an event of complete loss or vehicle theft. IDV can be referred as the present market value of an automobile. While calculating the IDV, the insurance companies take into the account the depreciation related to a vehicle. For vehicles older than five years, depreciation is not considered for calculating IDV. The owners of luxury cars must choose an insurer offering highest IDV. There is also minimum limit or minimum IDV offered by insurers that are ideal for inexpensive or old cars.

Exclusions: More often than not, the individuals ignore what’s excluded from the policy they have opted for. To avoid surprises at later stages, check the exclusion thoroughly.
For example, in some third party insurance policies, contractual liability claims or liabilities due to nuclear weapon materials are not covered. Some companies exclude cover for mechanical failure, along with normal wear and tear. The individuals using a private vehicle for commercial purposes may also not get the cover. The involvement of some illegal activity that may result in an accident is usually excluded from car insurance. These activities include driving under the influence of drugs or alcohol or driving without a valid driving license.


To differentiate it from other service providers, every insurer offers some features to make the overall process hassle-free. You must also go through these benefits that include easy renewal, 24 x 7 assistance, easy claim settlement process, and towing facilities. It is a wise idea to clarify your doubts by meeting a representative of an insurer.

Asking the insurer to remind you when renewal date is approaching is also necessary. A proper analysis of insurance schemes using these factors will narrow down your search process. Now that you know how to compare car insurance policies, you can now take a stress-free ride.


Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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