How To Evaluate The Best Car Insurance In India?

Car insurance provides financial security to the car owners against any financial loss due to accidental damage or other unfortunate events like theft, fire, natural calamities, etc. 

It is also a mandatory requirement to have at least a 3 years third party car insurance for all new cars as per the IRDAI regulations in 2018. 

In India, people usually buy the car insurance from the dealer who sold them the car without doing much research. However, there are several drawbacks to it, some of which are listed below –

1. You might be paying a higher premium on the car insurance.
2. You may have a lower Insured Declared Value (IDV) on the car insurance.
3. The car insurance company may not have many cashless garage networks.
4. The car dealer might not provide information regarding add-on covers.
5. The claim process is also not explained while purchasing a policy from the dealer.

To get the best car insurance in India, we recommend you to research the car insurance company first and then buy car insurance online. Following the below checklist should guide you in selecting the best car insurance in India: 

First, you should make sure that the car insurance company is registered with IRDA. Later, you can compare them on the basis of claim settlement ratio, incurred claim ratio, solvency ratio, claim settlement speed, cashless garage network, online customer reviews, IDV and premiums, 

• Table of Contents

  Claim Settlement ratio (CSR):

Claim settlement ratio is one of the most important points of comparison. You can get the CSR figure of every car insurance company in India from the IRDAI annual reports, it denotes the percentage of claims settled by an insurance company against all claims received in a year.

It is recommended to select insurance companies having higher CSR before you buy car insurance online.

• Incurred Claim ratio (ICR):

ICR indicates the financial ability of the car insurance companies to pay claims. ICR value is calculated using the value of claims paid against the total premiums received in a year. 

It is recommended to select insurance companies having higher ICR before you buy car insurance online.

• Solvency ratio:

Solvency ratio indicates the financial stability of an insurance company as it compares all assets and inflows against the liabilities and outflows. 

It is recommended to select insurance companies having higher Solvency ratio before you buy car insurance online.

• Claim settlement speed:

The claim settlement speed can also be checked for different car insurance companies.

It is recommended to select insurance companies having faster claim settlement speed before you buy car insurance online.

• Cashless Garage Networks:

Cashless garage networks are garages approved by the insurance provider for cashless car repair.

 It is recommended to select insurance companies having a long list of cashless garage networks before you buy car insurance online.

• Online customer reviews:

It’s difficult to evaluate the quality of customer service before you have purchased an insurance policy. You may view the ratings and read reviews of the customer service experience on the internet for any Insurance company, however that does not guarantee a good customer service.

Hence, it’s recommended that you buy a car insurance from an insurance agent or advisor who can be your point of contact for most of your customer service requirements and also guide you in choosing the best car insurance in India.

• Compare Insured Declared value (IDV) and premiums online:

IDV is the maximum sum assured that the insurance provider shall pay on the car insurance policy. Premiums are paid by the policyholder to the insurance provider for getting their car insured.

You can evaluate the best car insurance in India by comparing the premiums for a certain sum assured of different car insurance companies online and then select the policy which offers a certain sum assured at lowest premium.

• Buy any additional riders wisely:

Additional riders help in enhancing the scope of coverage of a car insurance policy. However, you should buy these add-ons only after reviewing the main policy documents as most often new buyers purchase add-ons which are already covered in their insurance policy. 

It is recommended to select insurance companies offering add-on riders such as Engine protection, zero depreciation, Roadside assistance, etc before you buy car insurance online.

• Choose between Third party car insurance or Comprehensive car insurance: 

A third-party car insurance provides financial cover for any damage caused to the third party due to your car accident. The car insurer pays in case of bodily injuries, permanent disability, temporary disability or death of the third party due to car accident, also property damage is covered up to Rs. 7.5 lakhs. It is mandatory to have third-party car insurance in India.

A comprehensive car insurance pays for any financial liabilities incurred towards a third party as well as own-damages. These policies not only cover road accidents but also damages caused by events like natural calamities, man-made disasters, explosion, fire, theft, etc.

It is recommended to purchase a third-party car insurance if you don’t use your car for travelling too frequently. However, if you travel in your car frequently, it’s recommended to purchase comprehensive car insurance.

Best car insurance companies in India: