Car and bike insurance: why you need it
Under the Motor Vehicles Act, every vehicle on an Indian road must carry at least third-party insurance. That covers injury, death or property damage you cause to someone else. Driving without it can mean a fine and, for repeat offences, imprisonment.
Third-party cover does nothing for your own vehicle, though. If your car is damaged in an accident, a flood or a fire, or your bike is stolen, only an own-damage or comprehensive policy pays for it.
Buying a new vehicle?
New cars need 3 years of third-party cover and new two-wheelers need 5, paid upfront at purchase. Own-damage cover can be yearly or long-term.
Types of motor insurance compared
| What's covered | Third-party | Standalone own-damage | Comprehensive |
|---|---|---|---|
| Damage or injury to others | Yes | No | Yes |
| Accident damage to your vehicle | No | Yes | Yes |
| Theft, fire, flood, riots | No | Yes | Yes |
| No-claim bonus & add-ons | No | Yes | Yes |
| Best for | Old, low-value vehicles | New vehicles that already have long-term third-party cover | Most car and bike owners |
No-claim bonus (NCB), explained
Every year you go without a claim, you earn a bigger discount on the own-damage part of your renewal premium, up to 50% after five years.
- Your NCB belongs to you, not the vehicle. When you sell and buy a new one, ask for an NCB certificate and carry the discount over.
- You keep it when you switch insurers.
- A single claim, even a small one, normally resets it to zero unless you have an NCB protector add-on.
- If your policy stays lapsed for more than 90 days, the NCB is lost.
For a small dent, compare the repair bill with the NCB you'd lose before you claim.
Add-on covers worth knowing
Add-ons come only with comprehensive or own-damage policies. Pick based on your vehicle's age and where you drive.
Zero depreciation
Pays the full cost of replaced parts with no deduction for wear. Most useful in the first five years.
Engine protection
Covers engine damage from water getting in or oil leaking, which a standard policy excludes. Valuable in flood-prone cities.
Return to invoice
If the vehicle is stolen or written off, you get its original invoice price rather than the lower IDV.
NCB protector
Keeps your earned discount even after a claim, usually up to a set number of claims a year.
Roadside assistance
Towing, flat-tyre help, a battery jump-start or fuel delivery when you're stranded.
Consumables & key cover
Pays for oil, nuts, bolts and coolant used in repairs, or replacement of lost keys and locks.
How a motor claim works
- Inform the insurer straight away, by app or helpline. Don't move a badly damaged vehicle before it's seen.
- File a police report for theft, or if someone else was injured or their property was damaged.
- Inspection: a surveyor checks the damage, in person or by video.
- Repair: at a network garage the insurer pays the garage directly (cashless). Anywhere else, you pay and claim it back.
- Settlement: you pay only the deductible and anything the policy excludes.
Keep these ready
- Policy number or copy
- Registration certificate (RC)
- Driving licence of the person driving
- Police report (theft or third-party claims)
- Photos of the damage and the garage's repair estimate
Common reasons claims are rejected
Driving under the influence or without a valid licence, an expired policy, normal wear and mechanical breakdown, using a private vehicle commercially, and damage that happened after an avoidable delay.
Car & bike insurance FAQs
What is IDV, and should I choose the lowest one?
IDV (insured declared value) is roughly your vehicle's current market value, and it's the most you'll receive if the vehicle is stolen or written off. A lower IDV cuts the premium slightly but leaves you short at exactly the wrong moment. Keep it close to the real value.
Is third-party insurance enough for an old car?
It meets the legal requirement. If your car is worth little and you could afford to repair or replace it yourself, third-party alone can make sense. If a theft or major repair would hurt your finances, comprehensive is still worth it.
Can I transfer my NCB to a new car?
Yes. When you sell the old vehicle, get an NCB certificate from your insurer and give it to the insurer of your new vehicle. The discount moves with you, not the car.
My policy has expired. Can I still renew?
Yes, but your vehicle isn't legally covered until you do, and the insurer may ask for an inspection first. Renew within 90 days of expiry to keep your NCB.
Does motor insurance cover the driver and passengers?
The owner-driver needs compulsory personal accident cover, either in the policy or as a separate policy. Passengers are covered only if you add a passenger accident cover.