What is Car Insurance?
Insurance is a protection against the financial loss arising on the happening of an unexpected event. A person can avail this protection by paying a premium to an insurance company. The primary purpose of Car Insurance is to provide financial protection to the policy holder against losses incurred due to any physical damages to their vehicle. Car Insurance is a type of Motor Insurance/ Auto Insurance or Vehicle Insurance. But sometimes, they all can be used interchangeably.
The losses and damages to your car covered under the Car Insurance may include:
1. Loss or Damage to your vehicle against Natural Calamities
Example: Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide.
2. Loss or Damage to your vehicle against Man-made Calamities
Example: Burglary, theft, riot, strike, malicious act, accident by external means, terrorist activity, any damage in transit by road, rail, inland waterway, lift, elevator or air.
3. Personal Accident Cover
Coverage for the individual driver of the vehicle while travelling, mounting or dismounting from the car.
4. Third Party Legal Liability
Protection against legal liability due to accidental damages resulting in the permanent injury or death of a person, and damage caused to the surrounding property. A Third Party Liability cover is legally mandatory in India under the Motor Vehicles Act.
As per the Motor Vehicles Act, 1988 it is mandatory for every owner of a vehicle plying on public roads, to take an insurance policy, to cover the amount, which the owner becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury or damage to property. A Certificate of Insurance must be carried in the vehicle as a proof of such insurance.
Following are the 5 popular Motor Insurance plans available in India:
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1. National Insurance Company:
National Insurance Company (NIC) is a Government of India Undertaking. It is the oldest insurance company in India (since 1906) and the only PSU non-life insurance company. As the Market Leader in two zones (North & East India) NIC has been recognized as “BEST IN SERVICE” in the MOTOR and HEALTH classes of Business which constitute 63% of the Indian Non-Life Insurance Market.
As per findings of the “J D Power Asia Pacific 2010 India Auto Insurance Customer Satisfaction Index” Study carried out recently, National Insurance ranks highest in customer satisfaction with auto insurance providers.
There are 2 types of covers available with NIC:
A. Liability only cover – insures you against any legal liability following an accident involving your vehicle. It does not cover any damage to your vehicle.
The policy covers the following risks only:
a) Injury or Death of Third Party
b) Property Damage (up to Rs.7.5 Lacs)
B. Package cover – Insures all liabilities, as per the Motor Vehicles Act, as well as damages caused to your vehicle. The package policy is better and also known as Comprehensive Motor Insurance policy as it provides both third party coverage and damages/loss to one’s own vehicle, co-passengers or self.
The policy covers Own Damage to the Insured vehicle caused by:-
a. Accident by External Means Fire, Explosion, Self-Ignition and Lightning
b. Transit by Road, Rail, Inland Waterway, Air, Lift
c. Burglary, House breaking or Theft
d. Terrorism, Riots, Strikes or Malicious Acts
e. Earthquake, Flood, Storm, Landslide, Rockslide
Best features of National Insurance Company:
a. Ranks highest in customer satisfaction with auto insurance providers
b. Extensive Strategic Alliance with India’s largest automobile majors Maruti, Tata Motors, Nissan, Honda etc.
c. Efficient Service Delivery
2. ICICI Lombard Car Insurance:
As per J.D. Power Asia Pacific 2010 India Auto Insurance Satisfaction Index (AIS) Study, ICICI Lombard is ranked number 1 in customer satisfaction amongst the private auto insurance providers. ICICI Lombard GIC Ltd. is the largest private sector general insurance company in India and received the highest rating in terms of overall customer satisfaction as well as ‘The most Recommended Company’ in a 2013 survey to assess Customer satisfaction.
Best features of Insurance Company:
Cashless servicing facility at 3100+ network garages across India
One of the best Road Side Assistance Cover available
Towing Charges up to Rs.1500 covered
Doorstep surveyor facility
3. United India Insurance Company Ltd.
This is a Government owned Company which has very high claim paying capacity which can be seen in their high solvency margin ratio and the highest rating given by ICRA.
Similar to National Insurance Company, the United India Insurance Company also provides 2 different packages for cover i.e Liability Only Cover (that covers 3rd party legal liability cover) and Own Damage package.
Best features of Insurance Company:
a. Highest Claim paying capacity
b. Discount allowed for Automobile Association Member, Vintage car, Anti-theft device.
c. No Claim Bonus ranging from 20% to 50% depending on the number of claim free years
d. Discounts on use of vehicles within Insured’s premises/sites
4. HDFC ERGO Motor Insurance:
HDFC ERGO is the 4th largest private sector general insurance company in India. It is a 74:26 joint venture between HDFC Ltd., India’s premier Housing Finance Institution and ERGO International AG, the primary insurance entity of Munich Re Group. HDFC ERGO has been assigned the rating of ‘iAAA’ by ICRA indicating its highest claim paying ability. The company also has ISO certification for its claim services, policy issuance & customer servicing.
Best features of HDFC ERGO:
a. Cashless claim service over 1600+ authorized network of garages across India
b. Special discounts – No claim bonus, Discount for Automobile Association Members, Discount based on age and profession
c. Comprehensive support through our dedicated customer support team
d. No lengthy procedures as Instant online policy renewal
5. New India Assurance:
New India Assurance Co Ltd, today, is a 100 % Govt owned multinational general insurance company operating in 22 countries and headquartered at Mumbai, India. It is the only direct insurer in India rated A-(Excellent – Stable outlook) by AM Best. It was incorporated in 1919 founded by the House of Tata Founder member – Sir Dorab Tata and was nationalised in 1973 with merger of Indian companies.