A comprehensive car insurance plan is a motor insurance policy that offers complete coverage to the vehicle against accidents, theft, and natural disasters. As opposed to third-party car insurance plans, such policies offer coverage for both damages to your car and to third-party vehicles, individuals and property, in the event of an accident.
In India, while third-party insurance is mandatory under the Motor Vehicles Act, comprehensive insurance is optional, although very necessary in terms of all-rounder protection.
Keep reading to gain a clear idea of how comprehensive car insurance plans work, their coverage, exclusions, add-ons and other crucial aspects.
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How Does a Comprehensive Car Insurance Plan Work?
Once you buy a comprehensive car insurance plan, you enter an agreement with the insurer to get coverage for damages to your vehicle and to third parties involving your car. You can file a claim in case your car gets involved in an accident and receive compensation if that particular circumstance is covered as per the policy documents.
However, before the insurer releases the funds, you are required to pay the deductible, which is a portion of the claim you agree to pay. The insurance company then refunds the balance or clears the bill.
Example:
Imagine your Hyundai i20 is insured with an insured declared value of ₹6,00,000 and a deductible amount of ₹5,000. Now, if an individual breaks the windshield and the cost of replacing it is ₹25,000, you will have to pay ₹5,000 while the insurance company will pay ₹20,000.
What Does a Comprehensive Insurance Policy Cover?
According to the Insurance Regulatory and Development Authority of India (IRDAI), a comprehensive insurance policy typically includes:
- Personal injuries or death due to accidents
- Car theft
- Third party damages, including injuries, property damage or death of a third party person
- Natural calamities like floods, cyclones, etc.
- Fire and explosions
- Man-made damages like strikes, riots, and terrorist attacks
- Accidents involving stray animals
- Transit damage
What is Not Covered Under Comprehensive Insurance?
Despite its extensive benefits, there are specific exclusions under a comprehensive car insurance policy:
- Wear and Tear: Damage due to regular usage, ageing, or depreciation
- Mechanical or Electrical Failure: Breakdowns not caused by accidents
- Driving Without a Valid Licence: Claims are rejected if the driver isn’t legally allowed to drive
- Drunken Driving: Accidents under the influence of alcohol or drugs are not covered
- Illegal Use of Vehicle: If the car is used for unlawful activities, the policy does not cover the damage costs
- War or Nuclear Risks: Damages due to war, nuclear risk, or civil unrest are excluded
- Commercial Use: If a private vehicle is used commercially without proper endorsement, the claim may be denied
Add-ons to Consider With Comprehensive Insurance
Here are the add-on covers to enhance your comprehensive car insurance:
- Zero Depreciation Cover: Ensures that there’s no deduction for your car’s depreciation value at the time of a claim. You receive the full claim amount without any reductions.
- No Claim Bonus (NCB) Protection: Protects your No Claim Bonus even after you make a claim. This allows you to advance to the next NCB slab.
- Emergency Assistance Cover: Provides roadside assistance when you need it the most and facilitates 24/7 support for any car breakdown or mechanical issue.
- Cost of Consumables Cover: This cover takes care of expenses for consumables such as engine oil, grease, brake oil, and oil filters.
- Tyre Secure Cover: Pays for tyre or tube replacement costs if they are damaged in an accident. This helps you save money on repairs or new tyres.
- Return to Invoice Cover: Ideal for new or high-value cars. If your car is stolen or completely damaged, you will receive the full invoice value.
- Engine and Gearbox Protection: This add-on covers repair costs for damage to the engine or gearbox, protecting the most critical parts of your vehicle.
- Downtime Protection: Covers your travel expenses when your car is in the garage.
- Loss of Personal Belongings: Protects against the loss of personal items, such as a laptop, mobile phone, or vehicle documents, from your car.
- Pay as You Drive Cover: With this option, you can receive up to a 25% refund on your own-damage premium if you drive under 10,000 km in a year.
Advantages of a Comprehensive Car Insurance Policy
The benefits of a comprehensive car insurance plan are as follows:
- Protection Against Damages and Losses
A comprehensive policy provides thorough protection of numerous risks such as accidental damage, theft, fire, floods, storms, and other natural or man-made calamities.
- Relief from Financial Liabilities
In the unfortunate case of damage caused by covered incidents, the comprehensive policy comes to the aid. It guarantees that you do not have to incur large amounts out of pocket for repair costs.
- Third-Party Liability Protection
This policy also provides protection against your third-party legal liabilities resulting from injury or death.
- Zero Depreciation Add-On
You get the full claim amounts for plastic, fibre and metal parts.
- No Claim Bonus (NCB) Protection
Provided you keep a claim-free record throughout your policy term, a no-claim bonus is awarded to you.
- Consumables Coverage
The costs of items such as engine oil, screws, nuts, bolts, brake fluid and coolant are covered in repairs. They are not typically included as part of a standard car insurance comprehensive policy, so this benefit can be especially helpful after an accident.
- Add-on Coverage
You can enhance your policy with useful add-ons like:
- Zero Depreciation Cover
- Engine Protection
- Return to Invoice
- Roadside Assistance
- Tyre Protection
- Key Replacement
- Peace of Mind for Car Owners
Knowing that your vehicle is safeguarded against a wide spectrum of possible damages, losses, and legal issues provides you with peace of mind.
Disadvantages of a Comprehensive Car Insurance Policy
While comprehensive car insurance offers broad protection, it also comes with certain drawbacks:
- Does Not Cover Collision Damage
Comprehensive insurance does not pay for damages resulting from a car-on-car collision or accidents involving road barriers. For such scenarios, you need collision coverage.
- Not Always Necessary for Older Vehicles
If your car is quite old, the payout may not be worth the premium, especially when the vehicle’s market value is low.
- Excludes Personal Belongings Inside the Vehicle
While the policy covers damage to your car, it doesn’t cover the expenses of items stolen from inside the vehicle. You need a separate add-on for that.
- Pothole Damage Often Requires Additional Cover
Standard comprehensive car insurance policies usually do not include damage caused by potholes or poor road conditions unless you opt for add-ons like engine protection.
- May Not Be Worth the Cost in Some Situations
In cases where your car’s market value is lower than your deductible, the insurance payout may be minimal or non-existent.
Cost of Comprehensive Car Insurance in India
The cost of a comprehensive car insurance policy is influenced by several factors:
- Insured Declared Value (IDV): Higher IDV = higher premium
- Make & Model: Luxury or imported cars attract higher premiums
- Car Age: Older cars have lower IDVs, hence lower premiums
- Geographical Location: Cars in metros or high-risk areas (like flood-prone zones) may incur higher premiums
- Claim History: Claim-free history qualifies you for No Claim Bonus (NCB)
- Deductible Selection: A higher voluntary deductible reduces the premium
Comprehensive vs Third-Party Car Insurance
The following table illustrates the difference between comprehensive and third-party car insurance:
| Feature | Third-Party Car Insurance | Comprehensive Car Insurance |
| Legal Requirement | Mandatory | Optional |
| Coverage | Only third-party liabilities | Own damage + third-party cover |
| Premium | Lower | Higher |
| Add-ons | Not available | Available |
| Own Vehicle Damage | No | Yes |
| Ideal for | Budget users, old vehicles | New or valuable cars |
| Personal Accident Cover | Available | Available |
| Theft/Calamity Coverage | No | Yes |
Process to Claim for Comprehensive Car Insurance
Here’s how to file a claim under a comprehensive car insurance policy:
- Inform Your Insurer: Immediately call your insurer or log into the mobile app.
- Take Photographs: Click clear pictures of the damage.
- Register the Claim: Fill out the claim form with relevant information.
- Surveyor Inspection: An insurer-appointed surveyor will assess the damage.
- Submit Documents:
- Copy of policy
- FIR (if required)
- Driving licence & registration certificate
- Repair estimate
- Repair and Settlement:
- Cashless: Visit a network garage for repairs
- Reimbursement: Get your car fixed and claim the amount later
Common Mistakes to Avoid While Filing a Comprehensive Car Insurance Claim
Here are a few mistakes to avoid while filing a comprehensive car insurance claim:
- Delaying intimation to the insurer
- Providing incorrect information
- Failing to document the damage properly
- Going to an unauthorised garage
- Not reading the policy wording carefully
Does Comprehensive Car Insurance Cover Pothole Damage?
No, pothole damage is typically considered collision damage, which is not covered under standard comprehensive insurance. You’ll need a collision add-on or own damage extension to claim such repairs.
Is Comprehensive Car Insurance Mandatory?
In India, comprehensive insurance is optional. However, it is highly recommended, especially if you:
- Have a brand new car
- Live in an area with high accident or theft rates
- Cannot afford high repair or replacement costs out-of-pocket
How to Buy Comprehensive Insurance Online?
Buying comprehensive car insurance online is easy. Here’s a step-by-step guide:
- Visit a trusted insurance provider’s website
- Choose ‘Car Insurance’ and enter your vehicle registration number
- Select ‘Comprehensive Plan’ from the options
- Compare plans and customise with add-ons
- Enter personal and vehicle details accurately
- Make the payment online
- Download the soft copy of your policy immediately
Comprehensive car insurance offers complete protection for your vehicle. It ensures that you’re not financially stranded when the unexpected happens. While it comes at a higher cost than third-party plans, the value it offers during emergencies far outweighs the premium.
FAQs About Comprehensive Car Insurance
Is comprehensive insurance worth it for a 5-year-old car?
Yes, if the car’s market value is still high and repair costs would be unaffordable, it is worth keeping the coverage.
Can I switch from third-party to comprehensive insurance mid-year?
Yes, you can upgrade your coverage during renewal or even mid-policy by paying the difference and undergoing a car inspection.
Can I transfer my NCB to a new car?
Yes. Your NCB is linked to you, not your car, and can be transferred to a new policy for a new vehicle.
What is the difference between IDV and claim amount?
IDV is the maximum amount your insurer will pay in case of total loss. Meanwhile, the claim amount is based on actual damages minus the deductible.
Can I get a discount on my premium?
Yes, via NCB, voluntary deductibles, anti-theft devices, and membership in automobile associations like the Automobile Association of India (AAI) or the Western India Automobile Association (WIAA).
