2024 Cheapest Motor Insurance Policy In India

Updated On: 2023-07-15

Author : Team Policybachat

Motor insurance is a crucial aspect of owning a vehicle in India, providing financial protection against unforeseen events related to vehicles. It is not only a legal requirement but also a practical necessity for vehicle owners. With the rising costs of vehicle maintenance and repairs, it is essential to find a motor insurance policy that provides adequate coverage without breaking the bank.

We explore the types of motor insurance, legal requirements, and factors influencing premiums. Additionally, we provide research strategies, tips for reducing premiums, and important considerations. Join us as we navigate the field of motor insurance to help you find the most affordable policy while ensuring your vehicle and finances are well protected. The importance of motor insurance in India can be understood from the following aspects:

  • Financial Protection: Motor insurance safeguards vehicle owners from financial liabilities arising from accidents, theft, or damage caused to their own vehicles or third-party property. It covers the costs of repairs, medical expenses, and legal obligations.
  • Legal Requirement: As per the Motor Vehicles Act, of 1988, it is mandatory for all vehicle owners to have at least third-party insurance to drive legally on Indian roads. Non-compliance can result in penalties or even vehicle seizures.
  • Rising Costs of Maintenance and Repairs: The expenses associated with vehicle maintenance and repairs have been steadily increasing in India. With the complexity of modern vehicles, even minor damages can result in significant repair costs. Motor insurance acts as a financial safety net, reducing the burden on vehicle owners in case of accidents or damage.

The objective of this article is to guide customers in their search for the cheapest motor insurance policy in India. While affordability is crucial, it is essential to strike a balance between cost and coverage. By exploring various aspects of motor insurance, researching options, and implementing cost-saving strategies, customers will be empowered to make informed decisions and find a policy that offers the best value for their money.

Understanding Cheapest Motor Insurance in India

In India, it is mandatory for all vehicle owners to have motor insurance as per the Motor Vehicles Act, of 1988. The following are the key requirements for motor insurance:

Types of Motor Insurance Policies

1. Third-party Liability Insurance:

Third-party liability insurance is a mandatory requirement for all vehicle owners in India under the Motor Vehicles Act, of 1988. It provides coverage for any bodily injury or property damage caused to a third party in an accident involving the insured vehicle.

  • This policy covers the legal liabilities of the insured in case of injury, disability, or death of a third party, as well as damage caused to their property.
  • The premium for third-party liability insurance is primarily determined by the cubic capacity (cc) of the vehicle, with higher cc vehicles attracting higher premiums.
  • All vehicles, whether private or commercial, must have a valid third-party liability insurance policy.
  • The minimum coverage mandated by law for third-party liability insurance varies based on the type of vehicle. For private cars, the minimum coverage is Rs. 15 lakhs for personal injury or death claims and an unlimited amount for property damage claims.
  • It is important to note that third-party liability insurance does not cover damages to the insured vehicle itself.

2. Comprehensive Insurance:

Definition and coverage: Comprehensive insurance provides coverage for both third-party liabilities as well as damage to the insured vehicle. It offers a more extensive coverage package compared to third-party insurance alone.

  • In addition to third-party liabilities, comprehensive insurance covers damages to the insured vehicle caused by accidents, theft, fire, natural disasters, and other specified perils.
  • The premium for comprehensive insurance is determined by several factors, including the vehicle's make, model, age, Insured Declared Value (IDV), geographical location, and the owner's personal details such as age, gender, and driving experience.
  • While third-party liability insurance is mandatory, it is not compulsory to have comprehensive insurance. However, it is highly recommended for enhanced coverage and protection.
Motor Insurance Policy Third Party Liability Insurance Comprehensive Car Insurance
1 Year 2094 8,627
3 Year 9,729 18,328
5 Year 18,020 25,832

*The above-mentioned values are for user reference only. Please compare motor insurance quotes to get exact values.*

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Why you should Buy Motor Insurance Policy in India?

Motor insurance is an essential requirement for vehicle owners in India, and there are several compelling reasons why buying a motor insurance policy is highly advisable. Let us explore the key reasons why you should invest in motor insurance in India:
Legal Requirement:

  • Motor insurance is mandatory as per the Motor Vehicles Act, of 1988. It is illegal to drive a vehicle on Indian roads without valid motor insurance, specifically third-party liability insurance.
  • Non-compliance can lead to penalties, fines, and even suspension of vehicle registration.  By purchasing motor insurance, you ensure compliance with the law and protect yourself from legal repercussions.

Financial Protection:

  • Motor insurance provides financial protection against unforeseen circumstances and potential liabilities arising from accidents or damages involving your vehicle.
  • Third-party liability insurance covers the legal liabilities towards third parties for injury, disability, or death, as well as property damage caused by your vehicle.
  • Comprehensive insurance goes beyond third-party coverage and provides protection for damages to your own vehicle due to accidents, theft, fire, natural disasters, and other specified perils.

Coverage for Vehicle Damages:

  • Accidents and damages to vehicles can result in significant financial burdens. Motor insurance helps mitigate these expenses by covering the cost of repairs or replacement of your vehicle, depending on the policy coverage.
  • Comprehensive insurance provides broader coverage, protecting your vehicle against a wide range of risks and perils.

Personal Accident Coverage:

  • Motor insurance policies often include personal accident coverage for the owner-driver. In the event of an accident leading to disability or death of the insured, the policy provides compensation to the insured or their family.
  • This coverage provides financial support during challenging times and helps ease the burden on the insured and their loved ones.

Peace of Mind:

  • Having motor insurance gives you peace of mind while driving, knowing that you are protected against potential liabilities and damages.
  • It provides a sense of security, allowing you to focus on your journey without constantly worrying about the financial consequences of accidents or damages.

No Claim Bonus (NCB):

  • Comprehensive insurance policies offer the benefit of No Claim Bonus (NCB). If you do not make any claims during the policy period, you become eligible for a discount on the premium at the time of renewal.
  • NCB rewards safe driving and responsible behavior, incentivizing policyholders to drive carefully and maintain a claim-free record.

Things to Consider Before Opting for Cheapest Motor Insurance Policy

While finding the cheapest motor insurance policy in India may seem appealing, it's important to consider certain factors to ensure you are making an informed decision. Here are key aspects to consider before opting for the cheapest motor insurance policy:

  • Coverage Sufficiency
  • Claim Settlement Process
  • Exclusions and Limitations
  • Insurance Companies Financial Stability
  • Customer Service Quality
  • Add-Ons and Additional Benefits

Remember that while cost is an important factor, it should not be the sole determining factor when choosing a motor insurance policy. Striking a balance between affordability, coverage, and reliability is crucial to ensure you have adequate protection and a hassle-free claims experience.

Which is the Cheapest Motor Insurance Company?

It is important to note that the pricing and coverage offered by motor insurance companies can vary based on several factors, including the type of vehicle, geographical location, and individual circumstances. Insurance premiums are determined by various factors, and the "cheapest" company may vary for different individuals. Additionally, the pricing and coverage of motor insurance policies can change over time. It is recommended to obtain personalized quotes from multiple insurance companies to determine the most affordable option based on your specific requirements.

Insurance Companies Motor Insurance Policies Insured Declared Value (IDV) Premiums  
HDFC ERGO 1 Year OD + 3 Year TP Rs. 3,67,200 Rs. 15, 303 Buy
Liberty 1 Year OD + 3 Year TP Rs. 3,30,030 Rs. 16,349 Buy
Shriram 1 Year OD + 3 Year TP Rs. 3,24,915 Rs. 12,195 Buy
TATA AIG 1 Year OD + 3 Year TP Rs. 3,45,240 Rs. 20,729 Buy
National 3 Year TP Rs. 2,93,834 Rs. 10,820 Buy

*The above-mentioned values are for user reference only. Please compare motor insurance quotes to get exact values.*

Factors Influencing Cheapest Motor Insurance Premiums

Several factors play a crucial role in determining the premium amount for motor insurance in India. Insurance providers consider these factors to assess the risk associated with insuring a vehicle and to calculate the appropriate premium. The following are the key factors that influence motor insurance premiums:

  • Vehicle Make & Model: The make and model of the vehicle significantly impact the insurance premium. Expensive and high-performance cars generally have higher premiums due to the higher cost of repairs or replacement parts.
  • Age of the Vehicle: The age of the vehicle also affects the premium. Newer vehicles may have higher premiums compared to older vehicles due to their higher market value.
  • Insured Declared Value (IDV): IDV is the maximum amount that an insurance company will compensate the policyholder in the event of a total loss or theft of the insured vehicle. It represents the vehicle's current market value. The premium is directly proportional to the IDV. A higher IDV leads to a higher premium, while a lower IDV results in a lower premium.
  • Personal Factors: Personal factors such as the age of the policyholder, gender, occupation, and marital status can influence the insurance premium. Younger and less experienced drivers, particularly males, may attract higher premiums due to the perceived higher risk of accidents. Profession or occupation can also play a role, as certain professions may be associated with higher or lower risk profiles.
  • No Claim Bonus (NCB): NCB is a discount provided by insurance companies as a reward for not making any claims during the policy term. It is applicable to comprehensive motor insurance policies. NCB can significantly reduce the premium at the time of policy renewal. The discount increases with each claim-free year, up to a maximum limit specified by the insurance company.
  • Geographical Location: The location where the vehicle is primarily used and parked can impact the premium. Areas prone to higher instances of theft, accidents, or natural disasters may have higher premiums compared to areas with lower risk.

Tips for Lowering Motor Insurance Premiums

Lowering motor insurance premiums can help you save money while ensuring you have adequate coverage for your vehicle. Here are some effective tips to reduce your motor insurance premiums in India:

  • Opting for a Higher Voluntary Deductible: A voluntary deductible is the amount you agree to pay towards a claim before the insurance company covers the remaining expenses. By choosing a higher voluntary deductible, you can lower your insurance premium. However, it's important to ensure that you can afford to pay the deductible amount in case of a claim.
  • Installing Anti-Theft Devices:  Equipping your vehicle with approved anti-theft devices such as immobilizers, alarms, or GPS trackers can reduce the risk of theft. Insurance companies often offer discounts on premiums for vehicles with installed anti-theft devices, as they lower the chances of the insurer having to pay for theft-related claims.
  • Maintaining a Good Driving Record: Safe driving habits and a clean driving record can have a positive impact on your insurance premium. Avoiding accidents, traffic violations, and claims for a significant period can make you eligible for discounts on your premium. Some insurers offer a "Safe Driver Discount" or "Good Driver Discount" based on your driving history.
  • Utilizing No Claim Bonus (NCB) Benefits: NCB is a discount provided by insurance companies as a reward for not making any claims during the policy term. The discount increases with each claim-free year, up to a maximum limit specified by the insurance company. By accumulating NCB, you can significantly reduce your premium at the time of policy renewal.
  • Insuring Multiple Vehicles under the Same Policy: If you own multiple vehicles, insuring them under the same policy can lead to cost savings. Many insurers offer discounts or reduced premiums for covering multiple vehicles under a single policy. This approach can be especially beneficial if the vehicles have similar risk profiles.

Cheapest Way to Buy Motor Insurance Quotes Online

At PolicyBachat we cater to the unbiased comparison of quotes, a 24*7 customer assistance team your motive is to give our customers the right details to compare and get free motor insurance rates online.

  • Go to compare motor insurance quotes online at PolicyBachat.com
  • Fill required details and select your car model, RTO Location, registration date, and email address.
  • Click on the START SAVING MONEY
  • Premiums with different insurance companies are displayed with low premiums
  • Select required add-ons/riders and discounts, or
  • Even you can edit policy details
  • After that fill in the vehicle owner details and owner details
  • Purchase motor insurance policy using online payment
  • If any queries are raised call: 1800-123-4003.

Wrapping Up:-

In conclusion, when it comes to buying motor insurance, it is crucial to consider several factors. We discussed the importance of comparing multiple options to find the most suitable policy for your needs. While affordability is important, it is equally essential to strike a balance between cost and coverage. By carefully assessing the coverage, add-ons, claim settlement process, and customer service of different insurers, you can make an informed decision. Motor insurance is not just a legal requirement but also provides financial protection and peace of mind. Therefore, take the time to research, compare policies, and make a well-informed choice that suits your budget and provides adequate coverage for your vehicle.

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