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Motor insurance

Introduction

You have just bought your own set of wheels and can't wait to get the motor running. But before you rev that engine up and hit the road, you need to buy a motor insurance. This insurance protects you against a loss or accident which may result in damage to your motor vehicle, death of the driver and passengers in an accident, or injury caused by your vehicle to another person or property (third party liability). In India, a motor insurance, with third party liability, is mandatory under the Motor Vehicle Act.

Choosing the right insurance policy is much like choosing the right motor vehicle. It has to fit your needs and lifestyle, yet be within your budget. While motor insurance can seem complex, we, at MoneyRaksha, help you get a policy which gives you the cover you need at a price you can afford.

Vehicles that need insurance

All vehicles plying on the road require an insurance. This includes two-wheelers, three-wheelers, four-wheelers, and heavy and light transport vehicles. These maybe largely classified under:

  • Private cars
  • Two-wheelers
  • Commercial vehicles

Insurance eligibility

If you are looking for a motor insurance policy, you need to provide details about you and your vehicle. Here is a checklist for you:

  • The driver of the vehicle is between 21 and 80 years of age, holds a valid driving licence, and is permanent resident of India;
  • The vehicle is owned and registered by you/ your spouse/ partner/ civil partner at your address;
  • You/your spouse/ partner/ civil partner are the main driver(s) of the vehicle. Your documents should state that the policyholder is the legal owner and registered authority of the vehicle;
  • The vehicle has not been modified or altered in any way;
  • The vehicle is used for social, domestic, and personal use, or for commuting to and from the place of work;
  • The total number of accidents/ claims/ convictions/ fixed penalties/ disqualifications for all drivers does not exceed five in the last three years.

Private car insurance

A car insurance covers losses due to traffic accidents or theft.

Coverage features

A car insurance policy covers the following:

  • Loss or damage to your vehicle due to natural calamities such as fire, explosion, lightning, earthquake, flood, hurricane, storm, cyclone, hailstorm, inundation, and landslide;
  • Loss or damage to your vehicle due to man-made calamities such as burglary, theft, riot, strike, accident by external means, terrorist activity, any damage in transit by road, rail, waterway, or air;
  • Personal accident cover for the individual owner of the vehicle. You can also opt for personal accident cover for the passengers;
  • Third party liability covering the legal liability arising out of an injury/ death of a third party or damage of property of a third party in case of an accident involving your vehicle.

(Please note that these are just illustrative pointers. You must refer the specific policy for an exhaustive list.)

What is not covered?

A car insurance does not cover the following:

  • Normal wear and tear or general ageing of the vehicle;
  • Depreciation or any consequential loss;
  • Mechanical breakdown;
  • Wear and tear of consumables like tyres and tubes unless the vehicle is damaged at the same time;
  • Damage to/ by a person driving without a valid license;
  • Damage to/ by a person driving under the influence of drugs or alcohol;
  • War or nuclear perils.

(Please note that these are just illustrative pointers. You must refer the specific policy for an exhaustive list.)

Claim process

To claim your motor insurance, you need to submit the claim form and policy copy along with various documents, which may vary depending on the type of claim:

If you are claiming a loss or damage to the vehicle due to an accident, you need to submit the following documents:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the driving license of the person who was driving the vehicle at the time of the accident;
  • The original repair estimate, repair invoice, and payment receipt;
  • A copy of the FIR lodged at the nearest police station.

If you are claiming a loss due to theft of the vehicle, the following documents are important:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the FIR lodged at the nearest police station;
  • All original keys;
  • The No-Trace Report confirming that the stolen vehicle is not traceable.

If it's a third party legal liability claim, the following documents are relevant:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the driving license of the person who was driving the vehicle at the time of the accident;
  • A copy of the FIR lodged at the nearest police station;
  • Any legal notice received by you.

Business car insurance

Sometimes you purchase a car specifically for business uses, such as attending meetings, running official errands, etc. In such cases, you need a business car insurance which has unique cover options.

Car insurance for business use is classified based on the type of use:

  • Private and semi-business use. This type encompasses private use, commuting, and occasional use for business purposes. Such a vehicle is not registered for business use and does not directly contribute to your income.
  • Private and business use. This covers all the features of a private and semi-business use along with the addition of business use for the regular driver, spouse, or any named driver on the insurance policy.
  • Commercial use. This covers policyholders for whom travelling in their own vehicle is a regular and essential part of the job.

Niche insurance

Some insurance policies target a niche audience. A few of them are given below:

  • Nominated-driver insurance policy. In this category of policies, the premium is calculated based on the fact that your car is driven by not more than two nominated drivers who are above 25 years of age. This type of policy is available only for cars.
  • Low-kilometre and nominated-driver insurance policy. An ideal policy for those who do not drive much. The premium is based on the fact that your car is driven by not more than two nominated drivers who are above 25 years of age and that the car will not be driven for more than 10,000 kilometres during the insurance period.

Two-wheeler insurance

A two-wheeler insurance plan applies to motor cycles, scooters, mopeds, and mechanically assisted pedal cycles. A comprehensive two-wheeler insurance covers losses due to traffic accidents or theft of the vehicle.

Coverage features

A two-wheeler insurance policy covers the following:

  • Loss or damage to your vehicle due to natural calamities such as fire, explosion, lightning, earthquake, flood, hurricane, storm, cyclone, hailstorm, inundation, and landslide;
  • Loss or damage to your vehicle due to man-made calamities such as burglary, theft, riot, strike, accident by external means, terrorist activity, any damage in transit by road, rail, waterway, or air;
  • Personal accident cover for the individual owner of the vehicle;
  • Third party liability covering the legal liability arising out of an injury/ death of a third party or damage of property of a third party in case of an accident involving your vehicle.

(Please note that these are just illustrative pointers. You must refer the specific policy for an exhaustive list.)

What is not covered?

A two-wheeler insurance policy does not cover the following:

  • Normal wear and tear or general ageing of the vehicle;
  • Depreciation or any consequential loss;
  • Mechanical breakdown;
  • Wear and tear of consumables like tyres and tubes unless the vehicle is damaged at the same time;
  • Damage to/ by a person driving without a valid license;
  • Damage to/ by a person driving under the influence of drugs or alcohol;
  • War or nuclear perils.

(Please note that these are just illustrative pointers. You must refer the specific policy for an exhaustive list.)

Claim process

To claim your two-wheeler insurance, you need to submit the claim form and policy copy along with various documents, which may vary depending on the type of claim:

If you are claiming a loss or damage to the vehicle due to an accident, you need to submit the following documents:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the driving license of the person who was driving the vehicle at the time of the accident;
  • The original repair estimate, repair invoice, and payment receipt;
  • A copy of the FIR lodged at the nearest police station.

If you are claiming a loss due to theft of the vehicle, the following documents are important:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the FIR lodged at the nearest police station;
  • All original keys;
  • The No-Trace Report confirming that the stolen vehicle is not traceable.

If it's a third party legal liability claim, the following documents are relevant:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the driving license of the person who was driving the vehicle at the time of the accident;
  • A copy of the FIR lodged at the nearest police station;
  • Any legal notice received by you.

Commercial vehicle insurance

Heavy Commercial Vehicles (HCVs) carry goods across the length and breadth of the country, making them a critical component of the Indian transportation industry. Since these vehicles travel so much, they are more prone to damages and accidents, making insurance a must for them.

A HCV insurance covers goods-carrying vehicles (trucks and trailers), passenger-carrying vehicles (buses, coaches, taxi-cabs, vans, and three-wheelers), and special type of vehicles such as rigs, shovels, tippers, tractors, excavators, etc.

Coverage features

A HCV insurance covers:

  • Loss or damage to your vehicle due to natural calamities such as fire, explosion, lightning, earthquake, flood, hurricane, storm, cyclone, hailstorm, inundation, and landslide;
  • Loss or damage to your vehicle due to man-made calamities such as burglary, theft, riot, strike, accident by external means, terrorist activity, any damage in transit by road, rail, waterway, or air;
  • Personal accident cover for the individual owner of the vehicle.
  • Third party liability covering the legal liability arising out of an injury/death of a third party or damage of property of a third party in case of an accident involving your vehicle.

(Please note that these are just illustrative pointers. You must refer the specific policy for an exhaustive list.)

What is not covered?

A HCV insurance policy does not cover the following:

  • Normal wear and tear or general ageing of the vehicle;
  • Depreciation or any consequential loss;
  • Mechanical breakdown;
  • Wear and tear of consumables like tyres and tubes unless the vehicle is damaged at the same time;
  • Damage to/ by a person driving without a valid license;
  • Damage to/ by a person driving under the influence of drugs or alcohol;
  • Damage caused by overloading or strain of the vehicle;
  • Damage to any bridge, duct, road, or anything beneath by vibration or by the weight of the vehicle or by the load carried by the vehicle;
  • War or nuclear perils.

(Please note that these are just illustrative pointers. You must refer the specific policy for an exhaustive list.)

Claim process

To claim your HCV insurance, you need to submit the claim form and policy copy along with various documents, which may vary depending on the type of claim:

If you are claiming a loss or damage to the vehicle due to an accident, you need to submit the following documents:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the driving license of the person who was driving the vehicle at the time of the accident;
  • license of the person who was driving the vehicle at the time of the accident;
  • Original repair estimate, repair invoice, and payment receipt;
  • Copy of FIR lodged at the nearest police station;
  • Load challan;
  • Fitness certificate;
  • Route permit;
  • Spot survey (within six hours of the accident).

If you are claiming a loss due to theft of the vehicle, the following documents are important:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the FIR lodged at the nearest police station;
  • All original keys;
  • The No-Trace Report confirming that the stolen vehicle is not traceable.

If it's a third party legal liability claim, the following documents are relevant:

  • A copy of the vehicle's Registration Certificate (RC);
  • A copy of the driving license of the person who was driving the vehicle at the time of the accident;
  • A copy of the FIR lodged at the nearest police station;
  • Any legal notice received by you.

Motor insurance FAQs