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What are Auto Insurance/ Motor Insurance/ Vehicle Insurance?

Auto insurance is an agreement between the insurance company and the insured customer in which the insurance company agrees to pay the claim amount in case of own damage or third party damage due to an insured peril in return for a nominal premium from the insured customer. The auto insurance is also known as Motor insurance or Vehicle insurance.

Motor insurance is offered to two wheelers, four wheelers and other commercial vehicles. The vehicle insurance has two sections namely own damage section and third party section. Own damage section covers the loss or damage to the vehicle due to any insured peril and the repair or replacement costs are borne by the insurance company at the time of claim. Third party section covers the bodily injury of third parties and property damage of and third parties due to the insured vehicle. The limit of liability under the own damage section would be Insured declared value as mentioned in the policy document. The limit of liability under the bodily injury of third party section would be unlimited and the claim would be awarded by the courts.

Vehicle insurance is to be taken mandatorily for any vehicle to ply in public places without which the owner/rider would be fined up to Rs.5k or up to 3 months of imprisonment. Any place which is accessible to general public would be considered as the public place for the purpose of insurance. Vehicle insurance can be taken online in 3 simple and easy steps using the our portal or call our toll free number 1800-123-4003 to get assistance from our motor insurance expert.

Auto insurance covers the loss or damage to your vehicle against natural and manmade perils which are mentioned in the policy document. Having an auto insurance policy increases the chance of protection of your vehicle from the insured perils. The financial and legal damages arising out of third party liability or damage can be reduced by having a vehicle insurance policy. There are certain rider benefits such as Depreciation cover, Engine cover, Key cover which are offered to the customers on payment of additional premium. These add-on covers increase the chance of claim settlement from the insurance company as the coverage is wider.

Motor insurance can be offered as Stand-alone third party insurance and Comprehensive insurance. While the stand-alone third party insurance is mandatory as per the Motor vehicles act, the comprehensive cover is optional. Having a comprehensive cover can increase the chances of claim settlement as the own damage section is also included in addition to the third party section.

What does NCB stand for in Auto Insurance?

NCB in Auto insurance stands for No claim bonus, which is a form of discount given to the insured customer at the time of renewal for not making any claims during the previous year policy year. No claim bonus discount is given on the own damage section of the Auto insurance policy. The no claim bonus increases level wise each year from 0% and reaches a maximum of 50% within 5 years for each claim free year.

NCB in auto insurance can be availed only at the time of renewal of auto insurance policy. NCB can be transferred from one insurance company to another at the time of renewal. The limit of NCB in the auto insurance policy copy would be mentioned under the own damage section in the comprehensive policy. No claim bonus would become Nil or 0% under the following scenarios:-

  • If there is a claim made in the previous year by the insured.
  • If the ownership of the vehicle is changed at the time of renewal.
  • If the policy is not renewed within 90 days of expiry of the previous vehicle insurance policy.

The No claim bonus slabs are mentioned below:

Claim Free years NCB
New vehicle 0%
1st Year 20%
2nd year 25%
3rd year 35%
4th year 45%
5th year and above 50%

No claim bonus discount would be applicable only on the own damage section of the vehicle insurance policy as the third party premium would be decided by the IRDA and the Govt of India. No claim bonus protection add-on is a specific kind of add-on offered by the insurance companies in which the customer can retain the NCB even after making one claim during the policy period. If more than one claim is made during the policy, the NCB would become 0% even though the customer has taken NCB protection add-on.

No claim bonus as mentioned earlier is a reward in the form of discount calculated on the Own Damage section of your car insurance policy. The Own damage section premium is first discounted according to the make, model of the car and then the discounted premium is again discounted for the No Claim Bonus thus arriving at the final premium.

Own Damage Premium   Rs. 20,000
Company Discount (-70%) Rs. 14,000
Premium after company discount Rs. 6,000
No Claim Bonus (Fifth claim free year) (-50%) Rs. 3,000
Premium to be paid after NCB discount Rs. 3,000

No claim bonus is calculated only on the Own Damage section of your car insurance policy and not on the Third party section as the TP premium is decided by the IRDA and cannot be further discounted. If you opt only for Third party insurance then the NCB discount will not be applicable on your car insurance policy. The No Claim Bonus is applicable only if you take the Comprehensive or the Package policy. NCB would not applicable on the add-on section of the car insurance premium.

In case of a claim in any year, the no claim bonus for the next year would become “Zero” and the cycle repeats.

It is important to note that the No claim bonus is given to the owner/driver of the vehicle and not the vehicle insured. So, in case of vehicle sold or transferred to a different customer, the NCB would not be valid.

How to purchase vehicle insurance online?

Let us understand & follow the steps to keep in mind for selecting the best car insurance in India online.

Policy Bachat: The first point in selecting the best car insurance in India online is to select the best online platform. Policy Bachat is one of the leading online platforms for Car insurance premium comparison in India. We have tied up with almost all the major insurance players in the market thereby offering the customer to choose the best option available. The vehicle insurance can be purchased online using the our portal by entering the basic details such as Make, model of the vehicle, date of registration of the vehicle and the RTO details.

Fill the Details: Once the basic details pertaining to the car are filled ad submitted you’ll receive a call from the Policy Bachat Team. Agents here are fully trained and equipped with high knowledge to guide you to compare car insurance premium online and select the best policy. The details to be filled would be displayed on the screen for easy understanding. In case you find it difficult to calculate the premium online you can call on our toll free number 1800-123-4003 and get assistance from our motor insurance experts.

Ask for particulars: Our agents collect the information related to vehicle such as cubic capacity, make and model etc., to generate the car insurance quotes online. If there is any requirement from your end, you are requested to pass it to our agents so that they can generate quotes for you to compare car insurance renewal quotes online.

Add-ons: Add-ons or Riders are the extra coverage offered to the vehicle on payment of extra premium. The add-ons or riders such as Bumper to bumper cover, Consumables cover, Engine protection cover etc., would be available on payment of additional premium. The add-ons should be purchased at the time of taking the vehicle insurance policy online as it would not be possible for midterm addition.

Comparison: Once the details are filled a link to compare car insurance quotes online is sent to you on your registered email id. Using this link car insurance premium comparison can be done and the best company can be selected.

Payment: Once the best car insurance in India is chosen with all the required add-ons then you can proceed for payment. Payment can be done with any of the means such as credit card, debit card, online payment etc.,

Instant Policy: Once the payment is done the policy is generated instantly. If you face any issues at the time of payment or policy issuance our agents are here to assist you.

Commercial Vehicle Insurance

Commercial vehicle insurance is taken by the vehicles which are categorized as Commercial vehicles driven for the purpose of business. Vehicles driven for the purpose of pleasure are classified as Private carriers. Commercial vehicle insurance is taken for vehicles which are used for business purpose such as carriage of goods or transport of passengers from one place to the other. Commercial vehicles such as Trucks, Tractors, Cabs, Taxi, Pickup trucks etc.require separate insurance policy which is known as Commercial vehicle insurance.

Commercial vehicles are subject to higher wear and tear when compared to the private cars since the usage of commercial vehicles would be higher. This heavy usage also increases the probability of the accidents and loss to the commercial vehicles when compared to the private cars which are driven less thereby reducing the probability of accidents. The best commercial vehicle insurance company in India can be found on the our portal where you can have assistance from our agents who are well trained to assist you in providing the best commercial vehicle insurance for you on the basis of your requirements.

Commercial vehicles are mostly the goods carrying trucks and the passenger carrying cars which constitute more than 90% of the commercial vehicles plying on the Indian roads. It is of utmost importance to select the best commercial insurance for your commercial vehicle to get the proper claim at the time of accident. Commercial vehicle insurance is usually valid for a period of 12 months from the risk inception date or the policy start date. Construction equipment used for the construction purpose of buildings such as Cranes, Mixers, Road rollers etc. can also be insured under the commercial vehicle insurance policy if there is a valid registration certificate for the same.

Commercial vehicle insurance is costly compared to the private car insurance due to the higher risk and higher liability associated with it. The main risk factor in the commercial vehicle is the death of passengers or third party claims where the losses would run into unexpected numbers. Most of the third party claims arising in India would be from the Commercial vehicles as these vehicles record the highest number of accidents. For instance, let us assume a passenger carrying commercial vehicle is met with an accident, then the third party claims in this case would be many times higher than that of the claim amount in case of a private car.

There are only few private insurance companies in India which are interested to underwrite the commercial vehicle insurance due to the heavy claims associated with the portfolio. Commercial vehicle insurance is done by all the public sector insurance companies in India without any rejections, while the claim settlement experience differs from one company to the other.

Types of Commercial Vehicle Insurance

Commercial vehicle insurance comes in 2 types: Third party only commercial vehicle insurance or Act only or Liability only commercial vehicle insurance & Comprehensive insurance.

Third party Commercial vehicle insurance: Third party commercial vehicle insurance covers the loss of life or bodily injury or third party property damage in case of accident involving the insured motorcycle. The third party death claims are awarded by the honourable courts and the insurance companies are complied, while the property damage claims are settled directly by the insurance companies up to the maximum limit mentioned in the policy copy.

Third party commercial vehicle insurance is mandatory by law for every commercial vehicle plying in public places without which the owner/driver of the vehicle would be fined or imprisoned. The premium for third party commercial vehicle insurance would be decided by the Insurance regulatory and development authority of India (IRDAI) depending in many factors such as the previous year GWP, previous year loss ratio etc. IRDA may change the third party commercial vehicle insurance rates each year and the same would be followed by all the insurance companies.

First party commercial vehicle insurance: First party commercial vehicle insurance covers the loss or damage to the commercial vehicle insured due to any insured peril such as accident or natural disaster. The insurance company would indemnify the insured customer up to the Insured declared value which is the maximum liability of the insurance company in case of an accident. First party commercial vehicle insurance is also called as Own damage insurance which covers the vehicle in case of any loss or damage. g

First party commercial vehicle insurance covers the loss or damage to the commercial vehicle insured due to any insured peril such as accident or natural disaster. The insurance company would indemnify the insured customer up to the Insured declared value which is the maximum liability of the insurance company in case of an accident. First party commercial vehicle insurance is also called as Own damage insurance which covers the vehicle in case of any loss or damage. g

Comprehensive commercial vehicle insurance: Comprehensive commercial vehicle insurance includes both the third party insurance and first party insurance. It is also known as Full insurance in the market and the premium is dependent on the cubic capacity of the vehicle as well as the make model. The comprehensive commercial vehicle insurance in India can be purchased online from https://www.policybachat.com/two-wheeler-insurance in 3 basic steps by entering all the basic details such as Make Model, Variant of the, Date of registration, RTO etc. and paying the premium. The comprehensive commercial vehicle insurance is valid for a period of 12 months from the date of risk inception.

Comprehensive commercial insurance with add-ons: Comprehensive commercial vehicle insurance is also offered along with add-ons or riders which offer extra coverage in the form of nil depreciation or Zero depreciation. The riders or add-ons can be taken by paying extra premium at the time of policy purchase. In commercial vehicles there is a concept of IMT sections which can be deleted or added at the will of the customer. IMT 23 covers lamps, tires, mudguards, bonnet, side parts without which the claim is not admissible for the damages caused to the above mentioned parts.

The reason for including this clause is that the depreciation in commercial vehicles would be on the higher side and thereby the chance of these parts getting damaged is high which result in frequent claims. To avoid petty claims and reduce the claims on the part of the insurance companies, this clause has been added where the customer can purchase on payment of additional premium.

Apart from these add-ons there are other riders such as Road side assistance in which the insurance company provides the assistance to the vehicles getting stranded on the road side. The major add-on opted by the commercial vehicles such as Trucks, Lorries, Auto rickshaws is the Bumper to Bumper cover on payment of extra premium.

How to Calculate Commercial Vehicle Insurance Premium?

Make & Model: The make and model of your commercial vehicle determines the premium charged by the insurance company. Some make models are charged higher premium due to the repair costs involved with that particular models. The cost of parts to be replaced or repaired is higher for some make of cars which results in higher premium.

IDV: Insured declared value is the sum insured opted by the customer for the commercial vehicle. IDV would be the maximum liability of the insurance company in case of any loss or damage. Higher the IDV, higher would be the premium of your commercial vehicle.

GVW: GVW is the gross vehicle weight which is the same as the cubic capacity in case of private cars and two wheelers. Gross vehicle weight is the weight of the vehicle plus the weight of the passengers, fuel and any other accessories. Higher the GVW, higher would be premium payable.

No claim bonus: The No Claim Bonus is given to the drivers who do not make any claim in the previous years of insurance. The NCB bonus is given in 5 slabs and ranges from 0% to 50% for each claim free year. The NCB discount is applied on the own damage premium before arriving at the final premium.Higher the NCB, lower would be the premium.

Manufacturing Date/Registration Date: The Date of Manufacture or the Date of registration is taken for the premium calculation to determine the age of the vehicle. Some insurance companies take the manufacturing date for determining the age of the vehicle while some insurance companies take the registration date to determine the age of the vehicle.

Loss Ratio: The loss ratio of the insurance company will also determine the premium to be charged for that particular model of commercial vehicle. If there are heavy losses for any particular make model of commercial vehicle the premium would be high and in some cases insurance companies may altogether decline such make models.

Zone: For the purpose of insurance, India is divided into 2 zones namely Zone A and Zone B. Zone A consists of the State capitals and Metropolitan cities while the Zone B consists of the other places excluding those in the Zone A. This is due to the experience that the cars in Zone A are more prone to accidents compared to that of the cars from Zone B.

Addition of IMT 23: As discussed above the premium of commercial vehicle would be calculated based on the selection of the IMT 23 clause. Having this clause increases the premium and provides extra coverage to the owner of the commercial vehicle.

Things to consider while Buying / Renewing Commercial Vehicle Insurance?

Insured Declared Value (IDV): Insured declared value is the sum insured provided by the insurance company for your commercial vehicle and is the maximum liability of the insurance company in case of an accident. The IDV provided by the insurance companies vary from one another in a particular range. Increase in IDV increases the premium to be paid by the customer. It is advisable to opt for the maximum IDV and chose the insurance plan that is offering the maximum IDV at the least possible price. IDV comes into play in case of total loss or constructive total loss.

Claim Settlement Ratio: Claims are the most important part of the insurance process. The real usage of insurance comes into play at the time of claim settlement.  It is important to compare the claim settlement ratio of the insurance companies before purchasing the commercial vehicle insurance policy as the claim settlement ratio reflects the chances of your claims getting settled. Higher the claim settlement ratio, higher the chance of your claim getting settled. Any company with the claim settlement ratio of 92% - 99% can be considered as the best insurance company.

Cashless Garages: Claim settlement can be done either cashless or reimbursement but the basic essence of taking an insurance policy is not to spend money at the time of claim. Cashless claim settlement option allows the customers to get their commercial vehicles repaired at any of the tie-up garages without paying the claim amount. The claim amount in case of cashless settlement is paid by the insurance company directly to the garages.

It is important to check for the list of Cashless garages available in your area of operation to enable you to go for cashless claim. If there are no cashless garages available in your place of residence then that insurance provider is to be avoided. The best commercial vehicle insurance in India is the one which has more number of cashless garages in your place of residence.

Riders/Add-ons: Riders or add-ons are the extra benefit provided in the insurance policy with the payment of extra premium. The best commercial vehicle insurance policy should contain the riders or add-ons which help at the time of accidental damage and claim settlement. Riders or add-ons include extra coverage to the commercial vehicle insurance such as Zero depreciation or bumper to bumper coverage, Consumables, Key protection etc. The riders / add-ons are offered by the insurance companies for a period of 2-3 years after which the riders would not be available. The rider premium varies from one company to the other. The major part of the premium paid for your commercial vehicle is the third party premium and the add-on premium if any opted. IMT 23 add-ons should be taken by the customers while taking the insurance policy to increase the coverage of your commercial vehicle.

Premium: Premium is the amount paid by the insured customer for the insurance coverage provided by the insurance company. The premium to be paid by the customer should not be high and at the same time coverage should be adequate. Premium amount is decided by the insurance companies and it should be reasonable and competitive. Too high premium or too less premium quotes should be avoided by the customers as there might be some hidden clause in it which reduces or increases the premium. The premium comparison for your commercial vehicle can be done on the our portal by entering the basic details of your commercial vehicle.

After Sales Service: Insurance is intangible and the need for insurance comes at the time of claims and after sales. There might be endorsements or changes in the policy which might be necessitated. The response and the turnaround time taken by the insurance company for the after sales service is to be taken into consideration before deciding on the purchase. After sales service includes all the endorsement requests from the customers such as Name change, address correction etc. and the claim settlement which is the major part of insurance.

Commercial vehicles are the source of income for many people and with each passing day of these vehicles in garages the income generating capacity of the customers would be reduced drastically. Hence, it is advisable to check for the insurance companies which can settle the claim in a minimum period of time.

Commercial Vehicle Insurance Cost

Subject to deduction of depreciation, commercial vehicle insurance price or IDV is fixed at the commencement of the policy. The IDV is decided based on the manufacturer’s listed selling price and brand of the vehicle. However, depreciation is a major factor that contributes a lot to commercial vehicle insurance. With age, the value of a vehicle depreciates and based on this rate, IDV is decided.

How to check vehicle insurance status online/ How to do vehicle insurance renewal online?

Let us understand & follow the steps to keep in mind for selecting the best vehicle insurance in India online.

Policy Bachat: First point in selecting the best car insurance in India inline is to select the online platform. Policy Bachat is one of the leading online platforms for Car insurance premium comparison in India. We have tied up with almost all the major insurance players in the market thereby offering the customer to choose the best option available.

Fill the Details: Once the basic details pertaining to the car are filled ad submitted you’ll receive a call from the Policy Bachat Team. Agents here are fully trained and equipped with high knowledge to guide you to compare car insurance premium online and select the best policy.

Ask for particulars: Our agents start collecting the information related to car such as cubic capacity, make and model etc., to generate the car insurance quotes online. If there is any requirement from your end, you are requested to pass it to our agents so that they can generate quotes to compare car insurance renewal quotes online.

Add-ons: Our agents will explain you the add-ons which can be taken by paying extra premium. If you require any particular add-on then please pass on the request to agent to enable them to calculate premium using car insurance premium calculator.

Comparison: Once the details are filled a link to compare car insurance quotes online is sent to you on your registered email id. Using this link car insurance premium comparison can be done and the best company can be selected.

Payment: Once the best car insurance in India is chosen with all the required add-ons then you can proceed for payment. Payment can be done with any of the means such as credit card, debit card, online payment etc.,

Instant Policy: Once the payment is done the policy is generated instantly. If you face any issues at the time of payment or policy issuance our agents are here to assist you.

Renewals: The same procedure is applicable for car insurance renewals quotes online. For renewals car insurance renewal premium calculator is used to generate the premium.

Vehicle insurance details by registration number in India

Vehicle insurance details can be found with the registration number of the vehicle. Follow below steps to find the insurance details of any vehicle using the registration number:

Step 1: The first step is to login to the website or download mParivahan app from the play store and Register with your phone number. The link to download the mParivahan app is. After entering the phone number OTP would be sent to the registered mobile number to login. You can login to the app whenever you want to check the insurance and other details of any vehicle using the registration number.

Step 2: The next step in this process is to enter the Registration number of the vehicle you want to know the insurance details about. After entering the registration number the insurance details would be displayed on the screen. The validity of the insurance would be displayed on the screen. It is important to note that the validity of insurance displayed here is the third party insurance validity. The owner name of the vehicle can also be seen on the screen but half of the alphabets would only be seen. On the screen we can also see the age of the vehicle in years and months which could be used to calculate the insurance premium of the vehicle. The fuel type of the vehicle would also be mentioned on the screen. This app can be used to know the validity of the insurance online by using the registration details only.

Step 3: The third step in the process is to download the Registration certificate from the app and save it. The same registration certificate could also be shared using any of the mediums. The screenshot of this would also be enough if you are not carrying the original Registration certificate with you at the time of travelling. Insurance companies would consider this as the registration certificate for the purpose of insurance policy issuance. It is important to remember that the insurance details would take some time to get uploaded onto the system after the insurance policy is issued.

Motor insurance in India

Motor insurance in India has been mandatory since 1988 after drafting the Motor insurance act, 1988 which mandated at least third party insurance for every vehicle plying in public places. There were motor vehicles in India in the early 19th century but the motor insurance was made compulsory after many years as there were no laws which would compensate the third parties which are affected in an accident. Let us understand the motor insurance in India in detail:-

Indian Motor Vehicles Act, 1914: The first act under the central legislation, the Indian Motor Vehicles Act of 1914 was passed under British India. With 18 sections in place, the Act enabled the local governments to regulate enforcements and to ensure the registration and licensing of vehicles and motorists to maintain road safety. The Act was later modified in some princely states in 1920 and 1924 and adhered to until the Motor Vehicles Act in 1988.

Motor Vehicles Act, 1988: The Motor Vehicles Act of 1988 made licensing of the motorists and registration of the vehicles mandatory. The Act introduced Learner’s license for all the drivers willing to obtain a license and mandated the use of the “L” board and the company of an instructor when driving in a public place. The Act also laid down rules and regulations for permit control, traffic regulation, motor insurances, and penalties. The Act proposed that no person under the age of 20 is allowed to drive a vehicle in a public place and a learner’s license or driving license should only be issued if he or she meets the eligibility requirement. With the Act, the limitations on third-party motor insurance were lifted and a cap for third-party liabilities up to Rs. 10 lakh for death and Rs. 5 lakh for serious injuries was proposed.

Motor Vehicles (Amendment) Act of 2019: Implemented since September 1, 2019, the Motor Vehicles (Amendment) Act 2019 was passed to ensure road safety with stricter rules. The major provisions under the Act include compensation up to two Lakhs for road accident victims and huge fines for willful offenders. The bill also reinstated a recall of vehicles for all vehicles which may be an unreasonable safety risk to other motorists, the driver, and the environment. With the amendment of the bill, the Central government created the National Road Safety Board as an advisory board on all aspects of road safety and traffic management.

With stricter rules and regulations, the Government aims to control road accidents thereby maintaining safer roads for the public. It is our duty to do our part by following these guidelines in the true spirit.

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