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Auto Insurance FAQs

Automotive insurance is a sort of insurance that is purchased for different types road-using vehicles to provide a protective cushion of financial security against damage to the vehicle and/or its occupants. There are varied forms of motor vehicle insurance in India, with many legal principles underlying them. Here is a list of Frequently Asked Questions (FAQs) related to automotive insurance to clear the fog of doubts you might have.

1. Is it mandatory to insure my motor vehicle?

Yes it is. After all the car is probably one of the most expensive things you have ever bought. Insurance helps cover the costs of potential damages or injuries in case of an accident or theft. Moreover, in India, it is compulsory to have a motor insurance before you can even start driving your car.

2. Can commercial vehicles be insured online?

Yes, all commercial vehicles can be insured online.

3. How can I renew my motor policy online?

You just have to be little clever to renew your policy online. With most insurance companies, you can renew it between the period starting 2 months before the expiry and/or 6 days after the expiry of the previous policy.

4. Can I take a policy for a vehicle that belongs to someone else?

Definitely. Anyone can buy motor policy acting on behalf of the insured vehicle.

5. When to file an FIR about my vehicle?

After incidents like "Bodily Injury to Self or to Third Party" or "Theft", you should immediately report it to the nearest police station, under whose jurisdiction the incident may have occurred.

6. What is No Claim Bonus?

Well, this is a little tricky, if you have not made a single claim in 12 months, you have to renew the policy to get an NCB (No Claim Benefit). As per the schedule of tariff, NCB can be earned in the Own Damage section of Policies covering all classes of vehicles but not on Motor Trade Policies (Road Transit Risks/Road Risks/Internal Risks) and not on policies that cover only Fire and/or Theft Risks.

All types of Vehicles
Discount on OD Premium
Non Claim Bonus for First year
Non Claim Bonus for Second year
Non Claim Bonus for Third year
Non Claim Bonus for Fourth year
Non Claim Bonus for Fifth year

7. Can I claim the insurance if someone else was driving at the time of the accident? Who will be covered?

Yes, you can claim the insurance, but the person driving the vehicle has to be a valid license holder. Also, the vehicle has to be insured for the particular type of accident that occurred. To insure the person driving the vehicle, who is not the owner, an additional personal accident cover has to be taken for this unnamed passenger.

8. If I have an accident with an uninsured vehicle, what is the extent to which I am covered?

If you have taken a comprehensive policy for your vehicle, you are completely covered in almost all types of cases like theft, mob violence, or accidents, irrespective of whether the other person has an insurance policy or not.

9. Is the "Third Party" insurance liability covered?

As mandated by the government, "Third Party" insurance covers are defined as follows:

  • Any permanent injury/death to a person caused by your car.
  • Any damage caused to the property (excluding vehicle) of some other individual by your vehicle.

In any of the above events, the insurance company will be fully liable to the person suffering such a loss.

10. What if I sell/transfer the vehicle during the insured period?

In case you sell the insured vehicle during the insured period, there are two options one may follow:

  • Transfer the policy to another vehicle that you own.
  • The policy can be endorsed to the new owner of the car sold.

11. What are the rules governing Personal Accident (PA) cover?

The motor insurance policy essentially has a PA cover for the owner and driver, as per tariff, for which no extra premium is charged. For a person other than the owner or driver, the PA cover has to be taken separately by paying an additional premium. The amount paid as compensation depends upon the extent of the cover chosen. However, for the driver, the extent of the cover is in accordance with the Workmenís Compensation Act.

12. Will I get a Personal Accident (PA) cover if the vehicle is registered under someone elseís name, but is driven by me and the premium also paid by me?

Policies essentially contain a PA cover for the owner or driver, as per tax. But in case of an unnamed driver, the accident cover has to be taken separately.

13. How can my No Claim Bonus be forfeited?

There are two reasons that forfeit your right to a No Claim Bonus:

  • If you make a claim.
  • If there is a break in the insurance period for more than 90 days.

14. Is there any discount available if I install an anti-theft alarm and locking system?

If your vehicle is fitted with anti-theft devices, which is approved by the Automobile Research Association of India (ARAI), a discount on premium is always allowed.

15. To what extend can the accessories of the vehicle be insured?

You can insure your vehicle accessories under the electrical and non- electrical accessories slot of insurance tariff. However, you need to declare the value of such items separately, which will be added to the sum insured over and above the IDV (Insuredís Declared Value).

Age of the Vehicle
% Of Depreciation For Fixing IDV
For Less than 6 Months
More than 6 months and less than 1 year
More than 1 year and less than 2 years
More than 2 years and less than 3 years
More than 3 years and less than 4 years
More than 4 years and less than 5 years

Note : The IDV cal for vehicles that have reached an age beyond 5 years or those which have been discounted by the manufacturer will be determined based on the judgment of the insurer as well as the insured.

16. How to calculate the value of accessories?

The value of accessories is calculated on the original cost of purchase of the accessory and cost depreciation according to usage.

17. What does a Legal Liability for a paid driver cover?

A legal liability to the paid driver is the legal compensation which is paid in case if a third party files a case on the driver for damage or loss during an accident.

18. Name the factors that affect the premium amount?

The premium rates are governed by tariff as decided by the Tariff Advisory Committee. The premium payable for your vehicle depends on the following elements:

  • Type of vehicle
  • Age of vehicle
  • City of registration
  • Period of the claim coverage
  • Any applicable discounts/loadings, as per relevant General regulation of motor tariff.

19. Why should my city of residence affect the premium amount?

As per the Indian Motor Tariff, different cities have different rating factors for premium.They are categorised in two zones as follows:

Zone - A :Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, and Pune.

Zone - B :Rest of Indian cities.

20. What are the benefits available to differently-abled people?

50% discount is available for institutions exclusively engaged in the service of the differently-abled people.

21. Can I make online claims? How?

In most cases you can avail online claims, but you need to have a few of the following documents handy:

  • Claim form duly signed
  • Valid R.C. copy of the vehicle
  • Valid driving license copy
  • Policy copy (a must)
  • Original repair bill, proof of release, and cash receipt

22. I have lodged a claim after the expiry of my policy date for an accident that occurred during the policy period. What do you suggest?

If an event takes place during the policy period, you can claim the insurance. However, we suggest you go through the procedure as soon as possible so that you can get the maximum benefit.

23. Will the claim affect my renewal?

NCB (No Claim Benefit) can be earned in the Own Damage section of Policies covering all classes of vehicles but not on Motor Trade Policies (Road Transit Risks / Road Risks / Internal Risks) and policies that cover only Fire and/or Theft Risks. However, in case you file a claim for any kind of damages during the insured period, at renewal, you will lose the NCB, but your renewal will not be affected in any other manner.