Vehicle Insurance in India
General information on taking out an insurance policy in India, with details on insuring a vehicle and making a claim…
The central government’s Motor Vehicles Act (1988) states that automobile insurance is compulsory for all vehicle owners. A valid copy of an owner’s insurance policy must be kept in the car at all times. As a result, car manufacturers have formed partnerships with leading insurance providers. Vehicle owners can get instant quotes for car insurance premiums by filling out a simple questionnaire at a car dealership or at an insurance provider’s website.
Generally, automobile insurance is comprehensive in India and policies are comparable with those in other countries. They cover damages to a car due to man-made or natural causes. Insurance policies will also have accident coverage to protect the driver and passengers.
Car insurance usually provides:
- Coverage for loss or damage as a result of accidents, fire, lightning, self-ignition, external explosion, burglary/theft or other malicious acts
- Liability for third-party injury/death, third-party property damage and liability to a hired driver
Additional premiums can be purchased to cover loss and damage to electrical/electronic accessories in the car.
However, automobile insurance does not include:
- Consequential loss, depreciation, mechanical and electrical breakdown, failure or breakage
- Coverage for when a vehicle is used outside of India (claims from other countries cannot be transferred or filed)
- Damage or loss caused by war, nuclear weapons or drunk driving
India’s major automobile insurance companies include:
- Bajaj Allianz
- Chola MS General Insurance Company
- HDFC Ergo
- ICICI Lombard General Insurance
- IFFCO-Tokio General Insurance
- Oriental Insurance
- Royal Sundaram Alliance Insurance Company
- Tata AIG Insurance
- The New India Assurance Company (government of India)
- United India Insurance Company
Despite the fact that motor insurance is mandatory and comprehensive, many drivers in India still do not have valid policies because it can be expensive and tedious to file claims. Most people would rather pay directly for any damages, as it is often quicker.
Filing a Claim
Three types of claim can be filed:
- Accidental claims
- Theft/burglary claims
- Third-party claims
The process is relatively straightforward. The procedure will be outlined in the insurance policy papers or it can be found on the company’s website.
The following documents are required to submit a claim:
- Signed claim form
- Copy of the driving licence
- Copy of the vehicle’s registration certificate
- Copy of the First Information Report (see “Accidents”)
- Copy of the policy agreement
A “bonus-malus” system is applied to car insurance policies in India. If two or more claims are filed in one year, the insurance company charges a “malus” the following year, which is an additional percentage on the premium. If there are no claims filed during a year, then the insurance company discounts the premium (a “no-claims bonus”).