Car insurance premiums are based on the vehicle's IDV (Insured Declared Value), age, and type. A comprehensive policy covers both own-damage (your car) and mandatory third-party liability (damage to others). Third-party cover alone is legally required in India, but comprehensive cover is strongly recommended given repair costs.
Worked Example:
IDV ₹8L, mid-size car, 2 years old → Estimated ₹18,000-25,000/year
What is No Claim Bonus (NCB) in car insurance?â–¾
NCB is a discount on your car insurance premium for every claim-free year. After 1 year without claims: 20% discount. After 5 consecutive claim-free years: up to 50% discount. This can save thousands annually. NCB is portable, it transfers to a new car or new insurer.
What is IDV in car insurance?â–¾
IDV (Insured Declared Value) is the market value of your car, what the insurer will pay if your car is stolen or totally damaged. It reduces every year as the car depreciates. A higher IDV means higher premium but better compensation. Setting IDV too low to save premium is a mistake many car owners make.
Is third-party car insurance enough, or should I buy comprehensive?â–¾
Third-party insurance is the legal minimum and only covers damage/injury you cause to others, it pays nothing if your own car is damaged, stolen, or destroyed. Comprehensive insurance costs more but covers your own car too, plus optional add-ons like zero depreciation. For any car under 5 years old, comprehensive is almost always worth the extra premium.
What is zero depreciation cover?â–¾
Normally, claim settlements deduct depreciation on parts like plastic, rubber, and fibre, sometimes up to 50%. A zero depreciation (or "bumper-to-bumper") add-on removes this deduction, so you get the full claim amount for repairs. It costs 15-20% more but is highly recommended for cars under 3-5 years old.