Frequently asked question about Car Insurance

1. Is car insurance mandatory? 
Yes, under provisions of the India Motor Vehicles Act 1988 car insurance is mandatory in India. Any vehicle used for social, domestic and pleasure purpose and for the insured's business or profession.
2. What are the different types of car insurance?
There are two types of car insurance

  • Liability only policy -This covers "Third Party Liability" for bodily injury and/ or death and property damage .Personal accident cover for owner-driver is also included.
  • Comprehensive Package Policy This covers third party liability, damage to own car and has various features as a package.

3. What is liability only policy?
Liability only policy covers third party liability for bodily injury and/or death and property damage and personal accident cover for owner-driver. It is mandatory under provisions of the India Motor Vehicles Act 1988. It can further be combined with fire and theft covers:

  • Liability Only Policy with Fire Only Cover.
  • Liability Only Policy and Theft.
  • Liability Only Policy and Fire & Theft.

4. What are exclusions?
There are certain conditions and situations where the vehicle is not covered. The list may vary for different companies, general exclusions may be:

  • Normal depreciation, wear and tear.
  • Mechanical or electrical breakdown failure or breakages.
  • Damage to tyres and tubes unless the vehicle is also damaged.
  • Car driven under the influence of intoxicating liquor or drugs at the time of loss.
  • Damage by person driving without a valid driving licence.
  • Damage due to war or nuclear crises.
  • Use of vehicle other than it is meant for.
  • Use of vehicle beyond specified geographical area.
  • Consequential loss.
  • Compulsory deductibles.

5. For what duration is a motor insurance issued?

  • Motor insurance is issued for duration of one year and needs to be renewed every year.