Introduction
Motor insurance in India isn’t just a legal formality — it’s your financial safety net. With roads getting busier and accidents more frequent, choosing the right motor insurance policy is more important than ever. Yet, many vehicle owners — whether new buyers or experienced drivers — make critical mistakes when buying or renewing their insurance policies. These mistakes can lead to claim denials, inadequate coverage, and unexpected out-of-pocket expenses.
Whether you’re buying a new car, insuring a two-wheeler, or renewing a commercial vehicle policy, understanding these common pitfalls can save you money and stress. In this blog, we highlight the most frequent mistakes people make when purchasing motor insurance in India and how you can avoid them.
Here are seven common motor insurance mistakes to avoid.
1. Opting for Third-Party Insurance Without Understanding the Limitations
Third-party insurance is the minimum legal requirement in India. It covers damages to another person or their property in the event of an accident. However, it does not cover damage to your own vehicle. Many people choose this option to reduce premium costs but regret it later when they face hefty repair bills. For holistic protection, consider a comprehensive insurance policy that includes own-damage cover and optional add-ons.
2. Declaring a Lower IDV (Insured Declared Value) to Save Premium
Some buyers try to cut costs by declaring a lower Insured Declared Value — the maximum amount the insurer will pay in case of total loss or theft. While this reduces the premium slightly, it also reduces the claim payout, leaving you underinsured. Always choose a realistic IDV that reflects your vehicle’s current market value to ensure you’re properly compensated in a major loss.
3. Ignoring Useful Add-On Covers
Add-ons like Zero Depreciation, Engine Protection, Roadside Assistance, and Return to Invoice offer enhanced coverage in real-world situations. Unfortunately, many policyholders skip these options to save on premium — only to face high repair costs later. For example, Zero Depreciation ensures you get the full claim amount without factoring in depreciation. Consider your location, usage, and vehicle type when selecting add-ons.
4. Not Comparing Policies Online
With so many insurers offering various plans, it’s crucial to compare before buying. Many people rely on dealers, agents, or friends’ recommendations without checking for better deals or features online. Use aggregator platforms or consult with trusted advisors to compare premium costs, coverage options, network garages, and claim settlement ratios to make an informed decision.
5. Providing Inaccurate or Incomplete Information
Submitting incorrect details like a wrong registration number, inaccurate chassis number, or hiding past claims can result in claim rejection. Always double-check your application form before submission and be honest about your claim history. Accuracy helps avoid disputes and ensures faster claim processing.
6. Missing Policy Renewal Deadlines
Letting your policy lapse, even for a single day, puts you and your vehicle at risk. You not only lose legal coverage but also forfeit benefits like the No Claim Bonus (NCB). Renew your policy on time or enable auto-renewal reminders via SMS, email, or mobile apps. Most insurers offer a grace period, but it’s best not to depend on it.
7. Not Checking Network Garages or Claim Process
During emergencies, many policyholders discover their preferred workshop isn’t in the insurer’s cashless network — leading to out-of-pocket expenses. Always check the list of network garages and understand the claim process in advance. Knowing the steps to file a claim, required documents, and whom to contact can reduce stress during accidents.
Conclusion
Buying motor insurance may seem straightforward, but the wrong choices can lead to financial strain and frustration. From choosing the right type of policy to selecting useful add-ons and ensuring timely renewal — every step matters. Avoiding these common mistakes will help you get the protection you need, avoid claim rejections, and make the most of your insurance investment.
At the end of the day, insurance is more than a checkbox — it’s about peace of mind and preparedness.
If you’re unsure about which motor insurance plan is right for you, our team is here to help. We’ll compare the best policies, explain the features in simple terms, and ensure you drive with confidence and complete protection.
📞 Need help choosing the right plan?
Contact us today for a free consultation or click below to get your instant quote.
