Third-party motor insurance is required by law, but most of what determines whether you’re actually protected goes beyond the legal minimum. Here’s a clear guide to what your motor policy covers, what it doesn’t, and the add-ons that are worth considering.
The Basic Split: Third-Party vs. Comprehensive
Third-party insurance covers damage or injury you cause to someone else — another car, a person, a wall. It doesn’t pay for any damage to your own vehicle under any circumstance. Comprehensive cover adds protection for your own vehicle from accidents, theft, fire, flooding, and other specified events. If your car is worth more than a nominal amount, comprehensive cover almost always makes more financial sense than third-party only.
IDV: The Number That Matters Most in a Total Loss
IDV stands for Insured Declared Value — the current market value of your vehicle after depreciation. This is the maximum your insurer will pay if your car is stolen or written off. Some policies let you declare a lower IDV to reduce the premium. But if the worst happens, your payout is limited to whatever IDV you declared. Before adjusting IDV downward, work out whether the premium saving over several years is actually worth the reduced claim you’d receive in a total loss.
Add-Ons Worth Knowing About
Zero depreciation cover means the insurer pays the full repair cost for parts without deducting for age-related wear — significantly useful for newer cars. Engine protection cover is valuable in flood-prone areas, since standard policies exclude engine damage from water ingress. Return-to-invoice cover pays you the original on-road price of the car in a total loss, rather than the depreciated IDV. NCB protection lets you make one claim per year without losing your no-claim bonus. Each add-on has a cost — whether it’s worth it depends on your vehicle’s age and where you drive.
Your No-Claim Bonus Adds Up Over Time
For every year you don’t make a claim, your own-damage premium reduces — starting at 20% after one claim-free year and reaching 50% after five. This NCB stays with you when you change cars. For minor damage where the repair cost is small, it’s worth calculating whether claiming is worth losing your accumulated bonus. Some people find it’s financially smarter to pay small repair bills out of pocket and preserve a 40–50% discount on their annual premium.
What Standard Policies Don’t Cover
Standard comprehensive policies don’t cover engine damage from oil leakage or water, mechanical breakdowns unrelated to an accident, tyre damage unless the rest of the car is also damaged in the same incident, or damage that occurs while someone without a valid licence is driving. These are common exclusions that often come as a surprise at claim time. Reading the exclusions list — not just the inclusions — before buying is the most useful thing you can do.
Draco Insurance offers motor insurance from 15+ insurers, with cashless repair options and a dedicated claims support team to help you through the process if you ever need it. Get a quick quote at dracoinsurance.in or call +91 7064106417.
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