Comprehensive Car Insurance

In India, car insurance is broadly divided into two categories.

1. Third Party Car Insurance

2. Comprehensive Car Insurance

With third-party insurance, you are only protected against the damages, losses, or injuries caused to the third party in case of a road accident involving your car. As per the Motor Vehicles Act, third-party insurance is mandatory for every car.

But what if the accident damaged your car and caused injuries to you as well? Unfortunately, with third-party insurance, you are required to pay for your injuries and car damages from your pocket. This is where a comprehensive car insurance policy can help.

If you are concerned about the financial losses in case if your car meets with an accident or stolen, it is time to know what comprehensive car insurance is and how it is different from third party car insurance policy. 

There is a widespread belief in India that comprehensive plans are expensive as compared to third-party plans. While this is not entirely false, the higher premiums of a comprehensive policy also offer significantly higher coverage. Own damages, injuries, or car theft could result in severe financial losses.

Paying higher premiums for a comprehensive plan makes sense as it could protect you against such losses. Moreover, there is also a smart way to reduce the premiums of your comprehensive policy. With No Claim Bonus or NCB, you can get discounts of up to 50% on the policy premiums.

Think of NCB as an incentive you receive from your insurer for not filing any claims. The NCB starts at 20% for the first claim-free year and reaches up to 50% in the fifth claim-free year.

Here is how the NCB works-

So, let’s say that you want to renew your comprehensive policy that you purchased last year as it is about to expire soon. If you did not file any claims last year, you have 1 claim-free year. So, you are entitled to receive NCB or premium discount of 20%. The NCB percentage will continue increasing up to the 5th claim-free year as per the table above.

But note that you will lose your accumulated NCB if you file any claims. So, even if you have 3 claim-free years and current NCB is 35%, you will have to again start at 0% NCB if you file any claims now. Also, the maximum NCB discount in comprehensive vehicle insurance is 50%.