How to get Car Insurance| North Loop Official Blog
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North Loop
22 Sep 2020

How to get Car Insurance

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What is Car Insurance?

Car insurance is essentially a risk-sharing contract between a car owner and an insurance company wherein the latter promises to pay for the repairs/replacement of the car in exchange for a premium. In other words, it is a type of motor insurance policy that protects you from monetary losses arising due to misfortunate events like accidents, fire, calamities etc.

Why should you buy a car insurance policy in India?

The primary reason for buying a car insurance policy in India is the fact that is mandatory to do so as per the Motor Vehicle Act 1988. Other reasons to go for a car insurance policy are as follows –

  • It reduces the financial and legal damages that can arise from third-party liability or damage.
  • It reduces expenses by providing benefits like roadside assistance and zero depreciation.
  • It covers expenses arising due to car damages as a result of natural or man-made calamities.
  • It covers hospitalization expenses in case of an accident.

Get a zero-balance, no-fee NRE/NRO account with North Loop in 5 minutes

What are the types of Car Insurance Policy?

There are three types of car insurance policy that are available in India –

Comprehensive Car Insurance – A comprehensive car insurance policy provides coverage for third party liability as well as damages caused to your car. It is an extensive coverage policy covering damages due to various reasons and can be further extended by opting for add-ons like accessories cover, engine protector, zero depreciation cover, medical expenses and others. The benefits and end-to-end coverage offered by this type of car insurance policy makes it the most popular choice for car owners.

Third-Party Car Insurance – This policy safeguards from any legal liability arising due to a car accident and protects from any financial liability towards a third party.

Usage-Based Motor Insurance – This policy allows you to pay insurance premiums as per the kilometres driven. It is a comparatively newly introduced insurance product that offers comprehensive coverage for own damage as well as third-party liability. In this policy, the premiums get decided based on the expected distance that will be covered during a policy year.

What are the benefits of a car insurance policy?

Opting for a car insurance policy is not just mandatory as per the law but also extremely beneficial. A third-party car insurance policy can provide protection liabilities towards a third-party, while a comprehensive cover can provide both third party coverage as well as protection against damage or loss. Here are a few other benefits of having a car insurance policy –

Personal Accident Cover – A personal accident cover under the motor insurance policy pays for the compensation in case of severe injuries or death resulting due to an accident. The limit of the coverage as defined by IRDAI (Insurance Regulatory and Development Authority of India) is Rs.15 lakh.

Loss or Damage of the Insured Vehicle – A comprehensive car insurance policy provides coverage against damage or loss to your car. In addition to this, it covers losses due to theft, burglary, or even transit-loss via train, air, road or inland waterways.

No Claim Bonus – A car insurance policy also provides a No Claim Bonus feature. It is available as a discount on a subsequent premium and makes the policy more affordable. You can avail this offer for each claim-free year.

10 Best Car Insurance Policies in India 2020 –

North Loop Car Insurance
Bajaj Allianz Car Insurance
Bharti AXA Car Insurance
HDFC Ergo Car Insurance
Kotak Mahindra Car Insurance
Liberty Car Insurance
SBI Car Insurance
Tata AIG Car Insurance
United India Car Insurance
Digit Car Insurance

How to calculate car insurance price?

Car insurance prices get decided based on a multitude of factors such as –
IDV (Insured Declared Value) of the vehicle
Type of the car
Engine’s cubic capacity
Geographical zone

You can also understand your EMIs on car loans using a car loan calculator.

The formula to calculate a car’s IDV is –

IDV = Car’s showroom price + Accessories Cost – Depreciation Value

The formula to calculate own damage premium is –

(IDV x [Car Premium as per the insurer]) + ([Optional benefits] – [NCB/Discount etc.])

Documents required for filing a claim for car insurance –

Copy of police FIR
Duly signed claim form
Fitness certificate for commercial vehicles
Driving license
Car Registration Certificate (RC)
Endorsed insurance documents

You can get a car insurance policy using relatively lesser documents with a service provider like North Loop and apply for car insurance online - the process is 100% digital.

Benefits of buying car insurance online –

No agents – Offline purchase of insurance policies involve agents who are more interested in selling their own products instead of offering policies that are best suited to your needs. Opting for car insurance online allows you to compare different policies and make informed decisions.

Zero paperwork – The offline mode requires the filling of multiple forms and production of a long list of documents. On the other hand, if you go for car insurance online, the entire application process is online and considerably faster. You can even upload the required documents online without going through the hassle of arranging hard copies of all the documents.

Time-saving – Contrary to the offline method, getting car insurance online is extremely easy and quick. You don’t have to visit any branch of the insurance company or meet their agents. You can simply pick an insurance provider like North Loop, download the App, and apply for the insurance with just a few clicks, all from the comfort of your home. It saves a lot of time and effort.

Payment reminders – You can forget policy payments or renewals and lose out on renewal discounts or get a break in your policy with the traditional insurance options. That can be avoided if you buy the car insurance online using digital platforms that send timely reminders before your due date to ensure that you do not miss out on the payments.

Cashless facility – Buying online car insurance policies ensures cashless transactions. You can make online payments of your insurance premium through different modes like debit card, credit card or net banking.

Easy comparison – Online platforms allow you to compare the coverage and premium quotes provided in different plans before choosing the policy that suits your needs.

Online Policy Document – One more benefit of applying for car insurance online is that you get a copy of the policy document in your email. That means you can access your policy document anywhere without having to carry the hardcopy all the time.

You can sign up with North Loop and get all the benefits mentioned above. It is a 100% digital platform and offers all advantages available with an online car insurance policy. To sign up, click here.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.