In most Indian families, buying a car is no less than a milestone. It brings a sense of happiness, convenience, and freedom. And undoubtedly, a car makes life easy. However, with that shiny ride comes a big responsibility—the responsibility of getting it adequately insured.

In India, car insurance is not only a good idea. It is mandatory according to Section 146 of the Motor Vehicles Act, 1988. Most importantly, it offers financial protection against accidents, theft, natural disasters, liabilities, and more. Also, a good car insurance policy brings peace of mind beyond the legal aspects.

So, with a market flooded with multiple insurance providers promising the best possible deals, how do you zero in on the best? Read on to cut through the clutter and find the best car insurance company.

Types of Car Insurance Policies

There are two types of car insurance plans in India:

  • Comprehensive Car Insurance: It covers own car damage, third-party liabilities, theft, and natural disasters. In short, it provides complete protection for your vehicle.
  • Third-Party Car Insurance: It is legally mandatory and covers damages or injuries caused to another person, vehicle, or property by your insured car. It does not cover its damage.

Significance of Car Insurance

Before we learn about India's best car insurance companies, let’s find out why car insurance is important:

  • Legal Compliance: Third-party car insurance is mandatory in India. So every car on the road must have it. Driving without it can result in penalties and legal issues.
  • Financial Protection: A well-designed car insurance policy helps cover the cost associated with accidents, including expensive repairs, medical expenses, and third-party liabilities.
  • Comprehensive Coverage: A comprehensive car insurance policy offers a wider extent of coverage. It includes risks such as theft, flood, fire, earthquake, and vehicle damage.
  • Third-Party Coverage: It will cover you financially if you are involved in an accident and damage someone else's property or injure them.
  • A Sigh of Relief: When you know your car and finances are protected, you can drive stress-free.

Also Read: Must-have Add-ons for a Newly Purchased Car

Inclusions and Exclusions  in Car Insurance Policies

Refer to the table below to understand the inclusions and exclusions in car insurance policies:

Inclusions in Car Insurance Policies

Exclusions in Car Insurance Policies

Own Damage Coverage: This protects your vehicle against damage from accidents, fire, floods, theft, etc.

Wear and tear: It is unlikely to cover regular depreciation or mechanical breakdowns not caused by an accident.

Third-Party Liability: It covers injury or damage to another person or property caused by your car.

Driving without a valid license: If you do not have a driving license or are driving under the influence of drugs or alcohol, your policy is unlikely to cover you.

Personal Accident Cover: This cover will likely compensate the owner-driver in case of injury or death. It is also mandated by law.

Unlawful use of vehicle: If you have been using your car for commercial purposes or racing without an appropriate policy, your insurance plan is unlikely to work.

Add-ons: Some plans may offer engine protection, zero depreciation cover, roadside assistance, return-to-invoice, etc.

Outside geographical boundaries: With most policies, damage outside India is usually not covered unless specified.

Manmade problems: Comprehensive car insurance also covers damage caused by manmade disasters such as strikes, riots, vandalism, and other civil disturbances.

Driving with an expired policy: If your policy has lapsed or expired, you cannot claim any financial compensation from your insurance provider. Therefore, make sure to renew your car insurance policy on time.

Vehicle Theft: If your insured car is stolen, the policy will cover an amount equal to your car's IDV or current value

Consequential loss: Any indirect loss caused by a specific action by you may not be covered by your policy. It includes damages due to car towing for parking in a no-parking zone, engine damage due to radiator overheating, etc.

How to Define the "Best" Car Insurance Company?

"Best" can mean different things to different people. Right? Here are some key factors to consider when choosing a car insurance company:

  • Claim Settlement Ratio (CSR): As the name suggests, CSR denotes the ratio between the total claims received by a company and the total claims settled by it. It tells you how likely the insurer is to approve and settle your claim. The higher the CSR, the better.
  • Customer Service: How easy is it to get help? Do they have a 24/7 helpline? Are their responses quick and helpful? A company that is available to you when you need it the most is likely to be a reliable one.
  • Premium Costs: A company offering cheaper premiums is not a benchmark of a good company. Instead, you should look for value, i.e., the right balance between cost and coverage.
  • Network Garages: A wider garage network means more options for cashless repair services.
  • Digital Experience: Options for online policy purchase, renewal, and claims make life much easier.
  • User Reviews: Customer feedback can reveal a lot about a company’s performance.

Whether you are a first-time car owner or looking to switch providers, choosing the right car insurance company is not just about picking the most affordable policy. It's about trust, ease of access, and how well the company supports you when you need them most.

Top Car Insurance Companies in India

Here is a list of some of India's best car insurance companies. You can compare the most suitable plans and then make a choice. Moreover, you can also get in touch with a PBPartners Insurance agent for personalised assistance:

Insurance Provider

Highlights

ICICI Lombard

Outstanding online services, huge garage network

HDFC ERGO

Good add-on options, seamless customer support

Bajaj Allianz

Quick claim approvals, user-friendly mobile app

Tata AIG

Zero depreciation plans, competitive premiums

SBI General Insurance

Wide reach, mainly in rural areas

Reliance General Insurance

Good for online policy issuance and renewals

New India Assurance

Trusted brand, economical premiums

Digit Insurance

Fast-growing, 100% digital process

ACKO Insurance

Fully digital, very low premiums

FAQs

1. Is third-party insurance sufficient?

Although third-party insurance is mandatory, it only covers damage to others. For protection against damage to your car, it is better to choose a comprehensive policy.

2. What is zero depreciation cover?

It is an add-on that ensures you get the full cost of replacing car parts without factoring in depreciation. This means higher claim amounts.

3. How is the premium calculated?

Premiums depend on your car's make and model, location, age, and the type of policy you buy. Add-ons and claim history are likely to affect the price.

4. Can I switch insurance companies?

Yes! You can switch insurance providers at the time of renewal. Compare policies and choose one that gives better coverage or premium rates.

5. What if I miss renewing my policy?

Although you will likely get a grace period of up to a week, driving without a valid policy is risky and illegal. Renew on time to avoid penalties and inspection hassles.

6. The insurance industry looks promising to me. How can I become a part of it?

If this industry interests you professionally, consider becoming a certified POSP insurance agent (a Point-of-Sales Person agent) authorised to sell insurance policies from various insurers. It is a rewarding career path with flexibility and earning potential.