5 Smart Tips to Compare Motor Insurance Policies in India

Motor insurance specifically the third-party liability is mandatory in India. Although, you have several choices when it comes to buying a comprehensive motor insurance policy. There is no choice to third-party cover. No one is allowed to ply on roads without valid insurance papers. Also, keep in mind that choosing the right policy has limitless importance. It provides a vehicle owner peace of mind, confidence, and financial security against expenses caused due to accidents, floods, riots, violence, earthquakes, theft, and other unexpected calamities.

In this blog content, we have discussed five essential tips that may help you compare motor insurance policies and make an informed decision. Read it carefully to avoid any type of inconvenience and take maximum advantage of your insurance plan.
 

Why Motor Insurance Matters?

Motor insurance provides several benefits beyond legal compliance:

1. Legal Compliance: A third-party liability insurance policy is mandatory under the Motor Vehicles Act.
2. Financial Protection: Covers repair costs, medical expenses, and compensation for third-party damages.
3. Comprehensive Coverage: Protects against theft, accidents, and natural disasters.
4. Customizable Options: Add-ons like roadside assistance, engine protection, and zero depreciation enhance coverage.

Choosing the right motor insurance policy ensures peace of mind while protecting your financial interests.

Here are the top 5 Essential Tips for Comparing Motor Insurance Policies in India:

Tip 1. Understand Your Insurance Needs:

The first step is to evaluate your specific insurance needs. This depends on factors like:

• Vehicle Type: Different vehicles (cars, two-wheelers, or commercial vehicles) have varied coverage requirements.
• Usage Patterns: Analyze how frequently you use your vehicle and the distances travelled.
• Risk Factors: Consider your location (urban or rural), accident-prone areas, or flood-prone zones.
• Insured Declared Value (IDV): This determines the maximum claim amount in case of total loss. Opting for the correct IDV ensures adequate coverage.
• Add-On Coverage: Add-ons like engine protection, zero depreciation, and roadside assistance are optional but provide enhanced security.

Example: If you own an older car and use it occasionally, a basic third-party insurance policy may suffice. However, for newer vehicles or frequent travelers, comprehensive coverage with add-ons is a better choice.

Tip 2. Compare Premiums and Coverage:

The next tip that plays a vital role in buying a motor insurance policy is the risk coverage and the payable premium for the same. So, to save some money, it is better to compare quotes from leading companies like:

• Royal Sundaram General Insurance Co. Ltd.,
• Cholamandalam MS General Insurance.,
• National Insurance Co. Ltd.,
• Bajaj Allianz General Insurance Co. Ltd.,
• Bharti AXA General Insurance Co. Ltd.,
• HDFC ERGO General Insurance Co. Ltd.,
• Reliance General Insurance Co.,
• Shriram General Insurance.

Keep in mind that vehicle age, location, usage, model, etc. are the deciding factors. Also, compare the features, and coverage provided by the insurers within the same premium.  

Pro Tip: Use online comparison tools to analyze plans from multiple insurers. For example, a plan with a slightly higher premium but added features like roadside assistance may provide better value.

Tip 3: Check the Claim Settlement Process

Another vital factor that matters is the claim settlement ratio. Running behind low premiums is not always right. There is no meaning of a low offered premium if you do not get the claim settled as and when the need arises. You need to understand the importance of a smooth claim settlement process and ratio. For the same, you can do the research work and do some homework on your own. 

Here's what to check:

• Claim Settlement Ratio: Higher CSR indicates better reliability.
• Customer Reviews: Look for real user experiences.
• Claim Process: Ensure the process is smooth, transparent, and quick.

Scenario

A customer, Rajiv Sharma, owns a high-end electric vehicle (EV). He has a comprehensive car insurance policy with a reputed insurance company. One day, while driving on a highway, he encounters a sudden power surge in the vehicle, causing it to lose control and collide with a roadside barrier.

Unjust Claim Denial:

When Mr. Sharma files a claim with the insurance company, he is shocked to receive a rejection letter citing the following reasons:

• "Act of God": The insurance company claims that the power surge was an "Act of God" and therefore not covered by the policy. However, power surges in EVs are often linked to manufacturing defects or inadequate charging infrastructure, neither of which can be classified as an “Act of God.”
• "Wear and Tear": The insurer suggests that the incident was due to the "wear and tear" of the vehicle's battery. This is a highly implausible explanation for a sudden, catastrophic event in a relatively new EV.
• "Lack of Proper Maintenance": The insurer demands proof of regular maintenance, even though the vehicle was serviced by an authorized EV service centre and had no prior mechanical issues.

Unprofessional Reasons:

• Delayed Response: The insurer takes an unusually long time to respond to the claim, leaving Mr. Sharma in a state of uncertainty and financial stress.
• Lack of Transparency: The insurer provides vague and contradictory explanations for the denial, making it difficult for him to understand the reasons.
• Poor Customer Service: The insurance company's customer service representatives are unhelpful and dismissive, refusing to provide clear information or escalate the issue to higher authorities.

This scenario highlights a common issue faced by EV owners, where traditional insurance policies may not adequately cover the unique risks associated with electric vehicles. It also exposes the unprofessional practices of some insurance companies that prioritize profit over customer satisfaction.

Learning: It is necessary to give priority to a good claim settlement ratio and a smooth process over a low premium.

Tip 4. Check the Insurer’s Reputation and Network

The reputation of the insurer and their garage network plays a crucial role in the user experience. Here’s why:

• Cashless Garages: Wide network coverage means you can avail repairs without upfront payments.
• Customer Support: Efficient 24/7 assistance adds convenience during emergencies.
• Brand Credibility: Established insurers often provide reliable service and ethical practices.

Pro Tip: Research the insurer’s presence in your area and their reputation for quick claim processing.

Tip 5. Read the Policy Document Carefully

Reading the motor insurance policy document carefully is the fifth essential tip to compare. Many times, there lies a point in the terms and conditions that may not be favourable for you. But if you don’t invest your time reading the policy papers, you might miss the point and face inconvenience at the time of claim. Key aspects to review include:

• Exclusions: Understand what isn’t covered, such as damages from regular wear and tear.
• Waiting Periods: Check for any waiting periods applicable for certain claims or add-ons.
• Add-On Conditions: Ensure the selected add-ons meet your expectations.

Ask questions and clarify any doubts with the insurer before finalizing your policy.

Common Mistakes to Avoid While Buying Motor Insurance:

To ensure you make the right choice, steer clear of these common pitfalls:

• Overlooking Add-Ons: While optional, add-ons can offer vital protection in specific scenarios.
• Focusing Solely on Premiums: A cheap policy might lack adequate coverage or have a poor claim settlement ratio.
• Ignoring the Fine Print: Skipping the terms and conditions can lead to claim rejections.
• Delaying Renewals: A lapsed policy can result in penalties and loss of benefits like no-claim bonuses.

Importance of Add-Ons in Motor Insurance:

Add-ons provide additional layers of protection:

• Zero Depreciation Cover: Ensures full compensation without factoring in depreciation.
• Roadside Assistance: Offers support for towing, minor repairs, and emergency fuel delivery.
• Engine Protection: Covers damages due to water ingress or oil leakage.
• Return to Invoice: Compensates the original invoice value of the vehicle in case of total loss.

Pro Tip: While these add-ons increase the premium, they offer significant long-term savings and convenience.

How Digital Platforms Simplify Motor Insurance Comparison?

Today, buying and renewing motor insurance has become simpler thanks to digital platforms. Benefits include:

• Instant Quotes: Get multiple quotes in minutes without visiting offices.
• Hassle-Free Renewals: Renew your policy online without paperwork.
• 24/7 Assistance: Many insurers offer round-the-clock support for queries and emergencies.
• Transparency: Access user reviews, ratings, and detailed policy information easily.

These platforms also allow you to compare reviews and ratings, making it easier to select the best policy.

Additional Tips for Smart Decision-Making

Here are some bonus tips to further refine your motor insurance selection process:

• Use Online Tools: Platforms like Policybazaar and Coverfox help compare policies and premiums.
• Seek Expert Advice: An insurance advisor can guide you in understanding complex policy terms.
• Opt for Long-Term Plans: These can offer discounts and eliminate the hassle of annual renewals.
• Look for No-Claim Bonuses: A history of claim-free years can significantly reduce your premium.

Check Discounts and Offers: Insurers often provide promotional discounts, especially for bundling policies.

Final Thoughts

The above-discussed 5 essential tips for Comparing Motor Insurance Policies may certainly make you make informed decisions. Remember, choosing the right motor insurance policy is vital for everyone. No matter whether you own a two-wheeler, a car or another type of vehicle, buying a motor insurance after considering the necessary factors can make you enjoy peace of mind, drive with confidence, avoid a dent in your pocket in the case of an accident, avoid penalties, and comply with the law.

One should not make haste and do research work prior to making the payment for your personal or commercial vehicle insurance. You can learn more about motor insurance and explore and compare the best motor insurance policies in India, visit InvestKraft today.

Author: Rajesh Mishra

Rajesh Mishra is a professional and multilingual writer with over 12+ years of versatile experience in content writing.

He has crafted compelling narratives across a diverse array of industries, including BFSI, fintech, IT, pharmaceuticals, e-commerce, education, fashion, and more. He is a commerce graduate from Mumbai University. His strong academic foundation and passion for storytelling enable him to engage audiences and deliver impactful content.

 

He is adept at transforming complex concepts into clear, relatable language, making his work accessible to both, industry professionals and everyday readers. He thrives in dynamic environments, leveraging his extensive knowledge to create articles, blogs, whitepapers, and marketing materials that resonate with target audiences. Driven by a commitment to excellence and a keen eye for detail, Rajesh Mishra continuously explores emerging trends and technologies, ensuring his content remains relevant and thought-provoking.