Motor insurance provides the much-needed financial cushion to individuals riding 2-wheeler and 4-wheeler vehicles (bike, car, jeep, scooter, etc.) against any financial losses incurred in case of an accident or damages from natural and man-made activities. As per the Motor Vehicle Act, 1988, it is mandatory for every vehicle owner to have motor insurance to ride a vehicle on Indian roads.

Motor Insurance helps people protect their vehicle from damages caused by themselves as well as provides coverage for third-party liabilities arising from accidental damage, injury or death. Motor insurance also ensures peace of mind when you drive on the road.

Here, we will discuss all the important aspects of Motor insurance, such as its types, reasons to buy, types of coverage in India, etc. So, without any further delay, let’s start!

Why Should You Go for Motor Insurance?

Motor insurance is a necessity considering the conditions of roads and the number of accidental deaths in India. In case you do meet such a thing, motor insurance can at least protect you financially. Some of the other reasons why you should opt for Motor Insurance are mentioned below. Do check!

  1. Legal requirement (It’s mandatory to have motor insurance for all drivers)
  2. Third-party damage coverage
  3. Protection against natural and manmade calamities
  4. Coverage against expenses incurred on vehicle damage repair
  5. Personal accident insurance
  6. Availability of add-ons like nil depreciation cover, engine protection, towing facility, etc.
  7. Cashless settlement at network garages
  8. No Claim Bonus option
  9. 24×7 roadside assistance

Types of Motor Insurance

Motor Insurance can be classified into three types – Car Insurance, Two-wheeler Insurance, and Commercial Vehicle Insurance. We are discussing each of them below. Have a look!

Car Insurance

As it’s clear from the name, car insurance protects your car and your finances in case of an accident, natural calamities, theft, etc. Many car insurance companies provide car insurance plans (covers both comprehensive and third-party liability) at an affordable premium. Some of the prominent features of car insurance are online policy issuance & renewal option, comprehensive coverage, usage-based insurance, personal accident coverage up to INR 15 lakh, No claim bonus up to 50%, free emergency fuel delivery, etc.

Two-wheeler or Bike Insurance

Two-wheeler insurance protects your finances in case of losses or damages incurred to your bike due to an accident. Some of the benefits of two-wheeler insurance are comprehensive coverage, 2 or 3 years of own damage motor insurance, No claim bonus protection, inflation protection, etc. You can also choose add-ons to enhance your coverage with zero depreciation cover, roadside assistance, consumables cover, engine protection cover, return to invoice cover, etc.

Commercial Vehicle Insurance

The third type of motor insurance is commercial vehicle insurance which protects commercial vehicles financially from damages or losses caused by it. It also protects the owner and driver of the vehicle.

Types of Motor Insurance Coverage in India

Irrespective of the vehicle you are buying, Vehicle insurance coverage can be classified into three types – Third-party policy, Comprehensive policy and Pay-as-you-go Policy. To know more, you can check the below table.

Types of Motor Insurance CoverageDetails
Third-party policyProvides coverage to a third-party injured in an accident involving you and your vehicle
Comprehensive policyProvides coverage against any losses or damages to your vehicle and its parts due to an accident, damage or theft along with the third-party coverage
Pay-as-you-go PolicyProvides policyholders the option to pay the premium as per the kilometers driven

Factors that Affect Motor Insurance Premium Amount

To get Vehicle insurance for your vehicle, you will need to pay a certain premium amount every year. This amount may change from one policy to another depending on the factors mentioned below. Please check!

  1. Model, make, and the variant of your vehicle
  2. Age of vehicle to find the depreciation value
  3. Engine type (petrol or diesel)
  4. The location where you will drive your vehicle
  5. Add-ons
  6. No Claim Bonus (discount in premium if you haven’t claimed in the previous year)
  7. Anti-theft features
  8. Type of coverage chosen
  9. Deductibles

Document Required to Buy Motor Insurance in India

Submit the following documents to buy Vehicle Insurance in India.

  1. Proof of identity (Aadhar/PAN Card/ Passport/ Driving Licence)
  2. Proof of address (Government-issued photo ID/ Passport/ Bank or post office passbook)
  3. Passport-size photo
  4. Valid Driving Licence
  5. Registration certificate of your vehicle

What is Not Covered Under Motor Insurance?

It is important to understand the exclusions under Vehicle Insurance so that you don’t face any trouble while filing a claim for the same. Have a look below to know the same!

  1. Depreciation of vehicles as normal wear & tear and mechanical breakdowns
  2. Driving under the influence of alcohol or drugs can make you ineligible for Vehicle insurance claims
  3. An invalid driving license while driving your vehicle will block all the benefits of motor insurance
  4. Unfavorable risks like war, mutiny and nuclear attacks