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Everything You Need to Know About Car Insurance in India (2025 Edition)

February 1, 2025

By Capalin Insurance Insights Team

Owning a car is a milestone—but protecting it is a responsibility. Car insurance is not just a legal requirement in India; it’s your financial safety net against accidents, theft, and natural calamities. Whether you're a first-time buyer or renewing your policy, understanding the nuances of car insurance can save you money and stress.

What Is Car Insurance?

Car insurance is a contract between you and an insurer that provides financial protection against physical damage or bodily injury resulting from traffic collisions, theft, or natural disasters. In India, it is mandatory under the Motor Vehicles Act, 1988 to have at least third-party liability insurance.

Types of Car Insurance Policies

1. Third-Party Liability Insurance

• Covers damages to another person’s vehicle, property, or bodily injuries.
• Mandatory by law.

2. Comprehensive Insurance

• Covers third-party liabilities plus damages to your own vehicle.
• Includes protection against theft, fire, natural disasters, and vandalism.

3. Standalone Own Damage Cover

• For those who already have third-party insurance but want to protect their own vehicle.

Key Add-Ons to Consider

• Zero Depreciation Cover: : Full claim without depreciation deduction.
• Engine Protection: Covers engine damage due to water ingress or oil leakage.
• Roadside Assistance: Help during breakdowns, flat tires, or towing.
• Return to Invoice: Reimburses the full invoice value in case of total loss or theft.

How to Save on Premiums

• No Claim Bonus (NCB): Up to 50% discount for claim-free years.
• Voluntary Deductibles: Opting for a higher deductible lowers your premium.
• Install Anti-Theft Devices: Certified devices can fetch discounts.
• Compare Plans Online: Use platforms like Capalin to compare and choose the best deal.

Renewal Tips

• Renew before expiry to avoid inspection and loss of NCB.
• Reassess your coverage needs annually.
• Consider switching insurers if you find better benefits or pricing.

Why Choose Capalin?

At Capalin, we simplify car insurance with:

• Transparent comparisons
• Instant policy issuance
• Expert guidance
• 24/7 claims support