Selecting the right kind of car insurance for your driving needs is very important. Hence, it is essential that you understand the basics of car insurance.

What is car/auto insurance?
As the name indicates auto insurance provides protection to you in case you injure a third party or damage their property. This situation can be very complex as it does involve legal liability and huge financial burden.

To avail this protection, you need to take an auto insurance policy, which is a written contract between you and the car insurance provider.

As per traffic norms, the Third Party insurance is mandatoru, which means whether you wish it or not you have to take it as it is essential to take third party cover the moment you own a car. You need to pay a specified amount of money as premium to avail the coverage benefits. Your policy lists all the inclusions and exclusions. So, read your policy document carefully.

What are the various types of car insurance coverage?
Though third party coverage is essential but it is better to take a comprehensive auto insurance policy that provides cover to your vehicle, your co-passengers and physical damage to your car. You can choose among the following:

Coverage for medical payments: Covers you and your co-passengers for injuries resulting out of auto accident. The coverage is extended towards you as a pedestrian also in case some vehicle hits you.

Collision insurance: Covers your car for the physical damage if your car hits some other vehicle, object or turns turtle.
Comprehensive insurance: Covers your car if stolen or damage caused by vandalism, fire and other factors. However, it excludes the damages caused by collision.

What are the general exclusions?
Depreciation of the vehicle
Electrical or mechanical breakdown
Drunk driving events
Damage caused by a person without a valid driving license
Damage caused by war, nuclear risk, mutiny
Damage outside India

What are the various types of discounts offered in auto insurance?
The discounts are offered on the basis of No claim bonus (NCB), and your registration with Automobile Association Discount.

How is NCB calculated in car insurance?
NCB is the discount you avail in the subsequent policy ifyou do not make any insurance claim in the current policy year. The discount is given on the current year and is calculated on the Own Damage Premium Amount.

Ist year: 0%
2nd year: 20%
3rd year: 25%
4th year: 35%
5th year: 45%
6th year: 50%
The maximum limit is 50%.