Getting your first car, whether new or new to you, is one of the happiest moments of most individuals’ lives.  After all, even now, when there are more cars on the road at any one time compared to most countries in the world, according to reports, only 7.5% of Indians own a car. 

And it is not just aspirational but a functional choice which can not just help you reach your destination quicker but also in a much more efficient manner. But despite this event, make sure to consider and be aware of the other necessary aspects, like securing your car with insurance. 

Even today, when it has been mandatory to get car insurance not just to secure your own car but also for those on the road with you, it comes as a surprise to many when buying their first car or renewing insurance every year. 

Not only this, as it is often their first encounter with car insurance, they may feel it is an added complication beyond the already complex requirements and considerations of buying a car. 

What is car insurance?

A car insurance is a type of insurance which is specifically designed to provide compensation or reimbursement for expenses borne to fix a car. Depending on the type of insurance, this can mean just the third party’s car to which you have caused harm, or in the case of comprehensive policies with your own damage car insurance, it also includes your car.

But imagine if you buy a new car and, within a few months, the front of the vehicle is totalled due to a mistake from your side, and instead of providing compensation for the expenses borne to fix your vehicle, the compensation is just paid to the third party. All this is because you did not read the policy details and just opted for cheap third-party liability coverage. 

This is why it is critical to understand and be aware of the implications as well as make the right choice when buying insurance.

What are the different types of car insurance? 

There are typically several different classifications for car insurance in India; these include policies, coverages, and usage. Here is a list of the different types for quick reference:

Policies

  • Third-party car insurance

Car owners should know that this is the minimum coverage that the Motor Vehicles Act in India mandates. This means that any vehicle driving on Indian roads must have at least this coverage to avoid fines. This policy protects the car’s owner from any legal liability to a third party caused by accidents resulting in bodily injuries, property damage, or death. 

However, unlike own damage insurance, it does not compensate for any damage caused to the insured’s vehicle, thus making it limited in scope and subjecting the policyholder to lacking coverage and thus making it necessary to look for a policy with own-damage car insurance as well.

  • Own damage car insurance

Own damage car insurance is a type of coverage that protects the insured’s vehicle from damage caused due to natural disasters like floods, earthquakes, and storms. It also covers losses incurred from man-made incidents such as theft, riots, and accidents caused by uninsured drivers.

  • Comprehensive car insurance

This is the best option for a new car, as comprehensive car insurance is the most extensive coverage available for vehicle owners. This policy offers protection against third-party liabilities and damage caused to one’s vehicle due to accidents, natural calamities, theft, and fire. In addition, in some instances, it also covers the costs of hospitalisation for drivers and passengers, towing charges, and personal accidents.

Coverages

  • Third-party liability insurance coverage offers compensation for damages and injuries caused to third parties from your vehicle. Also, it provides financial assistance for legal proceedings arising from accidents.
  • Comprehensive car insurance coverage encompasses third-party liability and own damage coverage by protecting against theft, fire, natural disasters, and collisions.
  • Personal accident cover provides compensation for the policyholder’s injury or death due to an accident, including coverage for permanent disabilities and accidental death.
  • Zero depreciation insurance ensures the policyholder gets the full claim amount without considering vehicle depreciation year-on-year. For example, most cars lose the value of their car by 15% in the first year, and 50% of the total value in 5 years no matter the car’s condition. Thus making it a key investment for newer cars.
  • Engine protection covers repair costs for engine damage due to water ingress or oil leakage.

Usage

  • Private car insurance
  • Commercial vehicle insurance

As the names suggest, private care insurance is for private individuals looking to secure their own car, while commercial vehicle insurance is for owners who wish to use their cars for commercial purposes.

How to choose the best car insurance for new drivers?

While buying insurance in 2025 is quite simple as it is possible to check out the pros and cons, features and issues all side by side to get the best deal, however, no matter whether you are a first-time buyer or have experience with insurance before, whenever buying insurance, due to the numerous types of plans, policies, and coverages it becomes challenging to choose any one. 

For example, one of the first filters people have when buying any product or service is the budget. For instance, if your car is new and you wish to avail yourself of zero-depreciation coverage to ensure your car’s value does not depreciate over time, but then there are dozens of policies with zero-depreciation coverage at a similar price-point with many points of parities and differentiation depending on the insurer. 

So how can one choose the right one from them?

Here are a few factors and questions to consider to get the best policy for your needs regardless of your budget:

  1. Type of car insurance policy
  2. Age of the Car
  3. Compare Plans Online
  4. Check Insurer’s Credibility 
  5. Faster Claim Settlement

Conclusion

To conclude, whether you are new to insurance or someone who has experience buying insurance in the past, there are dozens of factors to consider when looking to buy car insurance online, so check these aspects out and get the best policy for your needs from a leading insurer like Bajaj Allianz and travel freely with confidence and peace of mind.