How to Choose the Right Insurance Plan for Your Car in 2025

Author: Yatharth Singh Chauhan•Published on: 9/16/2025•4 min
Overview:Having a car is no longer a luxury for Indians. However, with the rising fuel costs, maintenance, and EMIs, it's highly important to save every rupee. One area where you can save money every year is with your car insurance plan. The correct plan can protect your vehicle and your budget. The wrong one? It could leave you stressed during an accident or breakdown. With dozens of options available, choosing the right car insurance can feel overwhelming. That’s why we’ve created this Car Insurance Buying Guide — designed to help you make an informed decision whether you’re purchasing your first policy or switching providers in 2025. Let’s get started with our easy-to-follow car insurance checklist.
Share this article
Article cover

Types of Car Insurance Plans


There are two main types of car insurance in India:


Third-Party Insurance

  • Mandatory for all as per the Motor Vehicles Act.
  • Covers damage to other people’s property or injury to others.
  • Doesn’t cover damage or injury to self.
  • Cheapest option with minimal protection.

Comprehensive Insurance

  • Covers third-party damages and even damage to your own car/injury to self.
  • Provides wider protection.
  • Costlier but with much wider cover.

Understanding the Important Add-Ons


Add-ons offer extra protection but also raise your premium. However, the following add-ons are highly recommended for better coverage and peace of mind:


  • Zero Depreciation Cover: Full claim without deduction for part wear and tear.
  • Roadside Assistance: Help with towing, fuel delivery, or jump-starts.
  • Engine Protection: Covers water damage during monsoons.

Optional Add-Ons

  • Return to Invoice Cover: Reimburses the full car invoice value if the vehicle is stolen or totalled.
  • Passenger Cover: Extra protection for people riding with you.

Compare Policies Online


It’s easy to compare insurance plans online. However, ensure you don’t get trapped by flashy ads and discounts. It's important to look for:


  • Genuine user reviews
  • Claim process feedback
  • Exclusions
  • Customer service quality

Use trusted comparison platforms. However, even visit the insurer’s website. Read the fine print very carefully. Understand the exclusions and terms around claim rejection before opting for a particular policy.


Don’t Ignore the No Claim Bonus (NCB)


NCB can be termed as a small reward for safe driving. If you don’t make a claim during the policy year, you get a discount at renewal for the following year. What's even better is that the discounts increase with every year of no claim.

  • 1st claim-free year: 20% discount
  • 2nd year: 25% discount
  • Up to 50% discount after 5 years

Think Long-Term


Please note that the car insurance cover isn’t just for today. Imagine what could happen in the next 2–3 years:

  • Will you use the car for daily office commutes or just for weekend drives?
  • Do you plan to drive through rough terrains or flood-prone areas?
  • Are you planning to sell your car in the next year or keep it for a long time?

These answers help you pick a plan that’ll support your real-life needs.


Final Thoughts: Choose Smart, Drive Safe


Your car is a valuable part of your life. So is your peace of mind. A good insurance plan protects both.

Don’t rush your choice. Use this car insurance checklist to compare policies carefully. Look beyond just the price and focus on what truly fits your needs.


FAQs


1. What is the best type of car insurance for a new car in India?

A comprehensive plan with zero depreciation cover is ideal. It protects your car and gives peace of mind.


2. How can I lower my car insurance premium in 2025?

Choose a higher voluntary deductible, maintain a clean driving record, and don’t make small claims to keep your NCB.


3. Is it okay to buy car insurance online?

Yes, buying online is convenient and often cheaper. Just make sure you check the insurer’s credibility and claim process.


4. What is a good claim settlement ratio?

Anything above 90% is considered strong. It means the insurer is likely to approve your claim quickly.


5. Can I switch insurance providers mid-policy?

Yes, you can switch during renewal. Some insurers also allow cancellation and refund of unused premiums, but terms vary.