First-party car insurance

Know everything about first-party insurance, what does it mean, its benefits, and how to raise a claim.
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3 mins
30-July-2023

Car insurance is an essential aspect of owning and operating a vehicle in India. It provides financial protection to drivers against several risks, such as theft, accidents, damage, and more causing damages to your car. When it comes to car insurance, it is essential to understand the different types of insurance policies available in the market. One of these types is first-party car insurance. Read on to know everything you need to know about first-party insurance, its benefits, and more.

What is first-party car insurance?

First-party car insurance, also known as first-party motor insurance, covers damages or losses incurred to a policyholder's own vehicle. It is an agreement between the policyholder and the insurer ensuring that the insured receives compensation in case of any damages caused to the vehicle.

First-party car insurance comes with a range of benefits. Know about the features and benefits of first-party car insurance in detail.

Benefits of first-party car insurance

Here are the features and benefits of first-party insurance.

Comprehensive coverage

First-party car insurance offers extensive coverage that includes coverage against damages caused due to several reasons. This car insurance policy includes damages due to accidents, theft, floods, earthquakes, fire, riots, vandalism, etc.

Personal accident cover

Personal accident cover provides coverage for medical expenses incurred for treatment due to accidents. It covers accidental death or disability. You get personal accident cover up to Rs. 15 lakh. Some car insurance policies also cover passengers injured in an accident while travelling in the car.

Add-on covers

With first-party car insurance, you have the flexibility to avail of add-on covers. These add-on covers enhance your basic policy, giving you extra financial protection and covering the parts of vehicles usually not covered under basic plans. You can avail of add-on covers like engine protection, accessories cover, consumables cover, and more.

No Claim Bonus (NCB)

You also get the benefit of NCB. If you do not make any claims during the policy period, you get a bonus. You can accumulate up to 50% NCB over five years if you record claim-free years. You can use this bonus later to reduce the premium cost when renewing the car insurance policy.

You can check how to calculate the no claim bonus here.

Difference between first-party and third-party car insurance

Here’s a quick look at the difference between first-party car insurance and third-party car insurance.

Parameters

First-party insurance

Third-party car insurance

Coverage

First-party insurance covers damages caused to your own vehicle due to natural calamities, man-made activities, or accidents.

Third-party insurance covers only the damages caused to the third party’s vehicle or property, even injuries caused to them.

Personal accident cover

Offered up to Rs. 15 lakh.

Not available on third-party insurance.

Premium

First-party insurance comes at a higher premium because it offers extensive coverage.

Third-party insurance policy has a standard premium set by the IRDAI.

Mandatory

No, it is optional.

Yes, the Motor Vehicles Act mandates car owners to have third-party car insurance to drive legally on Indian roads.

Add-on covers

Available

Not available


How to buy/renew first-party car insurance?

You can easily buy a car insurance online on Bajaj Finance Insurance Mall by following the below simple steps.

Step 1
Click on 'Get Quote’ button on this page to visit the online application form.

Step 2
Enter the vehicle type, car registration number, mobile number, and residential pin code. Check the terms and conditions and click on the ‘Get Quote’ button below.

Step 3
Choose the IDV, NCB value, add-on covers, and plan type to get a list of relevant car insurance policies. You need to update your current policy expiry date here.

Step 4
Click on the ‘Buy Now’ button to choose a car insurance policy. You will need to add owner-driver personal accident cover mandated by the RTO. Click on ‘Next’ to proceed.

Step 5
Confirm the vehicle registration date and the previous policy type (comprehensive car insurance /third-party). Click on ‘Proceed’.

Step 6
Enter vehicle owner’s name, date of birth, residential address, and contact number. Also, enter vehicle engine and chassis number (as per the RC) and previous first-party insurance details.

Step 7
Review your previously filled details and make the payment through your preferred online payment mode. You can use net banking, UPI, credit/debit card to buy the policy.

How to file a claim under first-party car insurance?

You can make claim settlement requests in two ways, cashless and reimbursement. Here's a step-by-step guide on how to file a claim under first-party car insurance:

Step 1: Inform the insurance provider

The first thing that you need to do is inform your insurance provider about the incident and file a claim. You can do it either online or by visiting the nearest branch office.

Step 2: Provide details

Once you have informed the insurance provider, provide all the necessary details like the date, time, location, and details of the incident. Attach copies of all the relevant documents like your driving licence, registration certificate, and first-party insurance policy.

Step 3: Evaluation

The insurance provider will evaluate your claim and verify all the details submitted by you.

Step 4: Cashless or reimbursement settlement

The insurance provider will offer you two options - cashless claim settlement or reimbursement claim settlement. Cashless claim settlement is where the insurance provider directly pays the repair costs to the garage. Reimbursement claim settlement is where the policyholder gets the repair costs reimbursed after they pay the garage themselves

Frequently asked questions

Is first-party insurance mandatory?

First-party car insurance is optional. If you have third-party insurance, then you may avail of first-party insurance to secure your own vehicle.

What documents do I need to raise a claim under first-party car insurance?

You will need to provide details like your driving licence, vehicle registration certificate, insurance policy number, and a filled claim form. You may have to submit a copy of the FIR report in case of theft or accident.

Which insurance is the best, first party insurance or third-party insurance?

It depends on your individual needs. First-party insurance provides comprehensive coverage for your own vehicle, while third-party insurance provides coverage for damages to a third party's vehicle. First-party insurance is more expensive but provides extensive coverage. Third-party insurance is mandatory and comparatively has a lower premium.

How can I reduce my first-party car insurance premium?

Here are a few tips to reduce the cost of your first-party car insurance:

  • Opt for a higher voluntary pay, which means you will have to pay the set voluntary amount during claim settlement. The insurer will pay the remaining amount
  • Install safety features in your vehicle that lowers the chances of risks.Avoid modifications to your vehicle like adding expensive accessories to your car.
  • Avoid modifications to your vehicle like adding expensive accessories to your car.
  • Drive safely and maintain a good driving record.

You can use the NCB collected over time for having claim-free years. You will get a discount on your car insurance renewal premium.

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Disclaimer

Insurance is the subject matter of solicitation. *T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third-party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, Niva Bupa Health Insurance Company Limited, Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

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