Updated on 7 Jan 2026
Driving in India comes with its share of surprises, from sudden weather changes to unexpected accidents. No matter how carefully you drive, some risks are simply beyond your control. That’s why having the right car insurance coverage is essential. It not only keeps you on the right side of the law but also protects you from financial stress when things go wrong.
Let’s explore the different types of car insurance coverage to help you make an informed decision.
Five types of car insurance
Each type of car insurance provides a different level of protection, depending on what is covered. Let’s explore the five main types of car insurance coverage available to Indian vehicle owners:
This is the most basic type of car insurance and is required by law in India. It provides financial protection if your vehicle causes injury or damage to another person or their property. This includes covering the cost of repairing the other person’s vehicle, paying for their medical treatment or offering compensation in case of death. However, this policy does not cover any damage to your own vehicle.
- Collision damage or own damage (OD)
This type of insurance is meant to cover damage to your own car. If your vehicle is involved in an accident, the insurance will pay for the repair costs. The premium for this cover is based on the car’s age and its Insured Declared Value (IDV), which represents its current market price. This cover is especially important if your vehicle has been purchased on a loan.
This cover provides financial help if the owner-driver is injured or dies in an accident involving the insured car. It pays for medical treatment and offers compensation in case of permanent disability or death. Personal Accident Cover ensures that you or your family receive financial support after a serious accident.
When you claim for replacement of car parts, the insurer deducts a certain amount for depreciation. However, with a Zero Depreciation add-on, the full cost of replacing damaged parts is covered without any depreciation deduction.
- Comprehensive car insurance
Comprehensive car insurance offers complete protection. It includes third-party liability, own damage cover and personal accident cover. It also covers non-accident-related events like theft, fire, flood and other natural disasters.
Types of add-on covers
While basic insurance covers the essentials, add-ons allow you to expand your protection. These optional covers can be included with a comprehensive car insurance policy to address specific risks. Here are the most popular add-on options:
- No Claim Bonus (NCB) protection
If you do not make any claims during the policy year, you receive a discount on your premium at the time of renewal. This add-on allows you to make a limited number of claims without losing your No Claim Bonus.
- Roadside assistance cover
If your car breaks down while travelling, this cover provides immediate help. It includes services like towing, fuel delivery and on-the-spot minor repairs.
- Repair of glass, fibre and plastic parts
This add-on allows you to make one claim per year for repairing non-metal parts such as glass, fibre or plastic without losing your No Claim Bonus.
If your car is under repair at a garage, this cover compensates you for daily travel expenses by reimbursing the cost of alternative transport.
- Emergency transport and hotel expenses
If an accident leaves you stranded far from your home, this add-on covers the cost of hotel accommodation and travel arrangements.
If your car keys are lost or stolen, this cover pays for the cost of replacing them.
Ideal for those living in areas prone to flooding, this add-on protects your car’s engine from water damage. It covers the repair or replacement costs of engine parts affected by water.
How is premium calculated based on the coverage?
Your insurance premium is calculated based on several factors. These include the Insured Declared Value (IDV) of your vehicle, the type and age of the car, the engine's cubic capacity and the geographical location where the car is registered.
The total premium usually includes three components:
- Third-Party Liability (TPL): This is mandatory by law and covers damage or injury caused to others. The premium is fixed by the IRDAI based on the engine capacity.
- Own Damage (OD) cover: This is optional and covers damages to your own car due to any accidents, natural calamities, fire or theft. The premium is a percentage of the IDV, which is calculated using this formula:
IDV = Showroom Price + Accessories Cost – Depreciation value
- Personal accident cover: This protects the owner-driver in case of any injury or death due to an accident. The premium increases with the insured amount.
Frequently Asked Questions
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Is comprehensive car insurance worth it?
Yes, especially if your car is of high value or you want peace of mind knowing you are protected in more situations, even if the accident is your fault.
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Does third-party insurance cover my car if it’s stolen?
No, third-party only insurance does not cover theft. You will require a comprehensive policy for theft coverage.
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Can I switch my policy before it ends?
Yes, but you may need to pay a cancellation fee. Compare the benefits and costs before switching.
Conclusion
Choosing the right car insurance is one of the most important parts of responsible vehicle ownership. From the mandatory third-party policy to the comprehensive car insurance, each type offers different levels of protection. Plus, with add-ons, you can get extra coverage for specific situations like breakdowns or engine damage.
If you are buying a new policy or renewing an existing one, consider your lifestyle, how you use your car and potential risks. A comprehensive insurance policy with suitable add-ons gives you the best protection on the road.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.