Car Insurance in India: Checklists during buying, renewing, before/after a claim

Every year I have to renew car insurance, I quickly scan this checklist to make sure that I have got maximum coverage for my car, without overpaying for useless addons.

Buying or renewing

• Choose your IDV
  • Maximize always?
  • Higher IDVs only serve to raise the premium. Payout in case of total loss will be as per depreciated value of the vehicle. It is best not to inflate IDV unnecessarily. Use the IDV calculator from the General Insurance Council to get an idea of the ideal IDV for your vehicle. (Source: team-bhp comment) Is this true?
  • See also content at bottom of this page: https://idv.gicouncil.in/
  • If am getting RTI, I keep the IDV low. If no RTI, the highest IDV possible. (Source: team-bhp comment)
• If you are renewing and you haven't registered a claim in previous year, make sure that you are getting a no claims bonus (discount) on your premium.

  • After year one of no claim	20%
    After two consecutive years of no claim	25%
    After three consecutive years of no claim	35%
    After four consecutive years of no claim	45%
    After five consecutive years of no claim	50%

• Buy both Own Damage (OD) and Third party (TP)
  • Is this comprehensive cover?
• Buy Zero depreciation (also known as "Zero dep")
  • Is this same as bumper to bumper?
  • Usually offered only for first 5 years.
    • So when you are renewing at the end of 4th year, if you have an option to buy for "3 years" (with zero depreciation included for 5th, 6th and 7th year), opt for it. I forgot to do this.
    • So when HDFC refused to offer this in 6th year, I checked other insurers and ICICI was offering this. So I switched my insurer, and bought a 3 year policy with zero depreciation included from ICICI (now my car has zero dep for 6th, 7th and 8th year).
• Buy NCB (no claims bonus) protection addon
  • This add-on cover lets you keep your NCB discount intact even if you raise any claim request up to a certain pre-decided limit.
• PA (Personal Accident) Cover for driver:
  • 15L is mandatory by law in India for every driver. But don't buy this for passengers.
  • Don't buy more than 15L, as this cover is rejected for stupidiest of reasons (unlike a Term Insurance policy). I have seen Acko offering a higher cover, but I don't recommend it.
  • If you already have this cover on any vehicle, you don't need to buy it again (e.g. I have this on my Activa bike insurance, so I haven't bought this for my car).
• Return to Invoice (RTI) addon:
  • Applies in case of theft as well as total loss (accident or natural calamity)
  • Usually available for the first 3 to 5 years of buying the car (This is because paying the ‘On Road’ price for an aged vehicle will convert into a financial loss for the insurance provider.)
  • Take it, if available for as many years as you can.
  • By bridging the gap between the vehicle and its Insured Declared Value and the actual invoice value, you are liable to be reimbursed for the total ‘On-road’ price of the vehicle you paid when you purchased it.
  • Full Reimbursement of Invoice Value: Ensures you get back the complete amount spent on purchasing the car, including taxes and registration fees.
  • Protection Against Depreciation: Shields policyholders from the impact of depreciation, which reduces the car's market value over time.
  • Keeping the car’s purchase invoice is crucial for claims.
• Compulsary/mandatory deductible: The premium amount of the car insurance is not affected by the amount of compulsory deductible.
  • The mandatory deductible sum for private automobiles of 1500 cc engine capacity and above is currently 2,000 INR, whereas for private cars with 1499 cc or lower engine capacity is 1,000 INR. There is, however, a condition. If your automobile is old, your insurance provider may raise your compulsory deductible amount. This is owing to the notion that the amount of risk and likelihood of claims are raised according to the vehicle's age. As a result, when purchasing car insurance coverage, make sure you understand your compulsory deductible value.
• Voluntary Deductibles: Not mandatory, but try if a Rs. 1000-2000 extra voluntary deductible is significantly reducing your premium. Take a call accordingly.
  • Think like this: Would you rather pay more upfront (and possibly make no claim), or incur some amount only when a claim is registered?

During a claim

• Compulsary/mandatory deductible: The mandatory deductible sum for private automobiles of 1500 cc engine capacity and above is currently 2,000 INR, whereas for private cars with 1499 cc or lower engine capacity is 1,000 INR. There is, however, a condition. If your automobile is old, your insurance provider may raise your compulsory deductible amount. This is owing to the notion that the amount of risk and likelihood of claims are raised according to the vehicle's age. As a result, when purchasing car insurance coverage, make sure you understand your compulsory deductible value.

After a claim

• If you have NCB protect/protection addon, make sure that the next renewal premium is calculated using this, after a claim.
• Verify policy, IDV, addons very carefully after a claim. Compare it with previous year's policy to make sure that coverage and premium is same-ish.

Extended warranty

• I bought it for my car from Renault.
• For electric cars? must buy?

Other addons/covers that I have NOT tried myself but might be useful

• Roadside assistance
  • esp for electric cars?

• Non-Electrical Accessories/Electrical Accessories (IMT-24)

  • IMT (Internal Motor Tariff) 24 in commercial vehicle insurance is offered by insurers to provide coverage
    for damages caused to electrical and electronic fittings that are not a part of the manufacturer's initial
    selling price. Some insurers may offer the electrical accessories add-on cover under the IMT 24. The

  • Especially if you have a expensive 3channel, 4K dashcam or expensive sound system
• Engine Protection Cover: esp If you live in flood prone area:
  • Covers oil leakage and water damage
  • Engine Protection covers damage causes by external sources like hydrostatic lock damage due to flooding and inundation, which is usually an exclusion under normal comprehensive insurance cover as well as (extended) warranty.
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