Types of Motor Vehicle Insurance Policies in India

Since its invention, the vehicle has proved to be a great gift to mankind. It not only offers comfort but gives you a sense of power. But, we all know, with great powers, great responsibilities are associated. And in this case, a major responsibility is buying a vehicle insurance policy.

Why is it Important?

As per the Motor Vehicle Act of Indian legal system, third party liability insurance is compulsory for every vehicle that runs on the road. Permanent injury or/and death of a third party is covered by third party insurance. Damage to a property of third party also comes under this liability. An individual has to pay a fine of up to Rs. 2000 or serve the term of 3 years in jail or both if his/her vehicle is not insured.

If we talk about the benefits to the vehicle owner, s/he gets rid of the worries related to repair in case of an accident. Not only a lot of money is saved, but the hassles related to the repair process are also managed. A lot of companies are also offering roadside assistance to help the car drivers in case an accident takes place. The vehicles are also covered against natural disasters and human calamities, which further adds to the importance of insurance.

By the type of vehicle on the roads, there are three types of motor insurance popular in India.

Car Insurance

With India being the sixth largest manufacturer of cars in the India, the number of cars on the roads ought to be massive. This is also the reason car insurance is the most popular form of motor insurance in the country. Car insurance covers legal liability to a third party due to accidental damages. Damage or loss to a vehicle due to man-made or natural calamities is also covered in most of the policies. The policies also offer personal accident cover, along with optional cover for co-passengers.

A lot of car manufacturing companies are offering insurance in a bundled form with the new cars. Let’s have a look at some major features of car insurance policies available in the market.

Reliance General Car Insurance Policy

  • Cashless facilities at more than 3800 garages that are associated with the policy
  • Add-ons covers include legal liability to paid driver, conductor and cleanerRoadside assistance worth Rs. 500
  • Instant online renewal through mobile wallets

Bajaj Allianz Car Insurance Policy

  • Lock and key replacement cover
  • Instant claims assistance and updates via SMS
  • The additional covers are offered through three categories, namely add-on packages, top-up covers and drivesmart covers
  • Ability to transfer 50 percent of existing no-claim bonus from any other insurance provider

ICICI Lombard Car Insurance Policy

  • Zero depreciation cover, along with cover on replaced parts without any deduction related to depreciation
  • Car towing and pick-up facility. Wash benefit is also available at some garages
  • Quality assurance of six months is offered on all repairs
  • Immediate loss assessment survey by relationship manager of the insurer

Some other popular insurers include HDFC ERGO car insurance, Royal Sundaram car insurance and Liberty Videocon car insurance. A lot of companies offer exciting discounts to individuals who purchase new policy or renew existing ones online.

Two-wheeler insurance

It is another major form of vehicle insurance in India. Apart from third party liability, the insurance covers against calamities like earthquake, fire, theft, flood, hurricane, storm and landslide. A long-term two wheel insurance (LTTW) is also introduced by the insurance regulatory and development authority of India (IRDAI). As a part of this policy, an individual can buy an insurance that is valid for 3 years. Some popular two-wheeler insurance policies include:

Bajaj Allianz Two Wheeler and Bike Insurance 

  • Hassle-free purchase and renewal of policies online
  • Insurance for one, two or three years
  • Around the clock service and claim support

IFFCO-Tokio Two Wheeler Insurance

  • No-claim bonus (NCB) is offered if an individual does not make claim when the policy is active.
  • Cashless claim through garages across India.
  • NCB is also applicable if a buyer shifts from another policy to this one.

Other popular policies include ICICI Lombard, Bharti Axa Two-wheeler insurance and Reliance two wheeler insurance.

Commercial Vehicle Insurance

All those vehicles that are used for commercial purposes, like buses, trucks, ambulances and agricultural vehicles are insured under commercial vehicle insurance. Just like car and two wheeler insurance, the policies for commercial vehicles offer protection against loss or damage to the commercial vehicle. Third party death/injury claims are also embedded in the policies. Some popular plans available in the market include:

  • Chola Commercial Vehicle Insurance
  • Royal Sundaram Commercial vehicle insurance
  • Tata AIG Commercial vehicle insurance
  • Bharti-AXA vehicle insurance
  • HDFC ERGO Motor vehicle insurance

The features and benefits offered under these policies are comparable to those of car and bike insurance.

Conclusion

By comparing the plans offered by each of these insurers, you can save up to 50 percent of the premium while purchasing vehicle insurance policy. If you want to renew an existing plan or want to purchase a fresh one for your new vehicle, you can go through policy comparison sites like ComparePolicy.com

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.

5 thoughts on “Types of Motor Vehicle Insurance Policies in India

  • April 30, 2017 at 1:57 PM
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    In above comparison why you didn’t mention about government policy companies like The New India ,Oriental,United India etc….??
    Is there any harm by enrolling with these companies??

    Reply
    • May 1, 2017 at 2:07 PM
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      Thank you for reading the blog. The plans used from different insurers are highlighted just as an example to express different benefits under motor vehicle insurance policies in the blog. It does not signify that other plans from private/public insurers are less important or good. It is important to compare and analyze your motor policy needs and then choose the best one as per your need and requirement.

      Reply
  • May 15, 2017 at 2:27 PM
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    Kindly let me know the types of insurance policies available for two wheelers in India

    Reply
    • May 15, 2017 at 3:38 PM
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      Thank you for reading the blog.There are 2 types of policies which can be availed for two wheelers in India which are :
      1.Liability Only Policy/ Third Party Two Wheeler Policy
      2.Comprehensive/ Package Two Wheeler Policy

      To know more about the two wheeler insurance policies you may visit :-

      https://www.comparepolicy.com/motor-insurance/two-wheeler-insurance

      Reply
  • May 16, 2017 at 7:09 AM
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    I have been riding motor for so many years. I really need to get a motor insurance soon. Thanks for sharing.

    Reply

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