Last updated: October 2026 Β· 3 min read
Under the Motor Vehicles Act, 1988, every vehicle on Indian roads must have at least third-party insurance. A comprehensive policy also protects your own vehicle. Choosing the right cover and add-ons saves money when accidents happen.
Third-party vs comprehensive
| Third-party only | Comprehensive | |
|---|---|---|
| Mandatory? | Yes | Optional (includes third-party) |
| Covers injury/death of others | Yes, unlimited liability | Yes |
| Covers damage to others’ property | Yes, up to a limit | Yes |
| Covers your own vehicle damage | No | Yes: accident, fire, theft, flood |
| Premium | Fixed by IRDAI | Depends on IDV, add-ons and NCB |
What is IDV?
Insured Declared Value is the current market value of your vehicle, the maximum the insurer pays for theft or total loss. It falls as the vehicle ages. A very low IDV cuts premium but also cuts your payout.No-claim bonus (NCB)
For every claim-free year, you get a discount on the own-damage premium: 20% after one year, rising to 50% after five consecutive claim-free years. NCB belongs to you, not the vehicle, and can be transferred to a new vehicle.
Popular add-ons
| Add-on | Why it helps |
|---|---|
| Zero depreciation | Full cost of replaced parts without depreciation deduction |
| Engine protection | Covers engine damage from water ingress or oil leaks |
| Return to invoice | Pays the original invoice value on total loss or theft |
| Roadside assistance | Towing, flat tyre and battery help |
| NCB protection | Keeps your NCB even after a claim |
| Consumables cover | Pays for oil, nuts, bolts and other consumables |
How to claim
- Inform the insurer immediately through the app or helpline.
- File an FIR for theft, major accidents or third-party injury.
- Take photos and do not move the vehicle unnecessarily.
- Get a surveyor inspection.
- Use a network garage for cashless repairs or pay and claim reimbursement.
Frequently asked questions
Is it illegal to drive without insurance?
Yes. Driving without at least third-party insurance can lead to fines and other penalties under the Motor Vehicles Act.
Does comprehensive insurance cover floods?
Yes, natural calamities such as floods are covered under own damage; engine damage from water may need an engine protection add-on.
Should I claim for small damages?
Often not, because you may lose your NCB; compare repair cost with the NCB discount.
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- More Insurance articles on Tiwaripedia
This article is for general information, not financial, tax or legal advice. Rates, limits and rules change; always confirm on the official website or with a qualified advisor before you act. Spotted something that needs updating? Let us know.
