Car insurance is not just a legal requirement — it’s a financial shield.
Yet, many car owners in India still treat it like a formality. They buy the cheapest plan, skip renewals, or ignore important details.
In 2025, insurance companies are adding new rules, online claim systems, and AI-based premium calculators.
To stay protected, you need to understand what can go wrong — and how to fix it.
Here are the top 5 mistakes Indian car owners often make with their insurance and simple ways to avoid them.
1. Choosing the Cheapest Policy Without Checking Coverage
Many people think all insurance plans are the same. They just pick the cheapest option to save a few hundred rupees.
But a low-priced policy usually means limited coverage. It may not protect you during theft, floods, or third-party damage.
How to avoid it
Always read the coverage details before buying.
Compare at least three companies — look for own damage cover, personal accident cover, and zero-depreciation add-ons.
A slightly higher premium can save you thousands later.
2. Forgetting to Renew the Policy on Time
A very common mistake in India is missing the renewal date.
Once your policy expires, you lose all protection.
If an accident happens even one day after expiry, you will have to pay from your pocket.
How to avoid it
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Set a reminder on your phone or calendar.
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Most insurers now allow auto-renewal online.
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If your policy has already expired, renew it immediately — some insurers allow reactivation after inspection.
Pro tip: Renew before the due date; you might even get a No-Claim Bonus (NCB) discount.
3. Ignoring Add-Ons Like Zero Depreciation or Engine Protection
Add-ons cost a bit more, but they give you real peace of mind.
Without a Zero Depreciation cover, the company deducts depreciation value when settling your claim — meaning you get less money.
Without Engine Protection, damage caused by floods or oil leakage may not be covered.
How to avoid it
While buying or renewing, tick the essential add-ons:
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Zero Depreciation
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Engine Protection
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Return-to-Invoice
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Roadside Assistance
For cities like Mumbai, Chennai, or Dehradun where heavy rain is common, engine cover is a must.
4. Not Transferring the Policy When You Sell or Buy a Used Car
When you sell your car, the insurance policy doesn’t automatically move to the new owner.
Similarly, if you buy a second-hand car, driving it without transferring the policy is risky and illegal.
How to avoid it
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Always transfer the insurance along with the RC (Registration Certificate).
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Notify your insurer within 14 days of ownership change.
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If you buy a used car, confirm the policy validity and claim history before payment.
5. Hiding or Giving Wrong Information While Buying a Policy
Some people hide past accident history or give wrong details to get lower premiums.
It may seem smart, but it causes problems later.
If the insurer finds out wrong information during a claim, they can reject it completely.
How to avoid it
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Always enter correct details about your car and driving history.
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Don’t fake previous policy data or registration year.
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Transparency builds trust and ensures faster claim approval.
Bonus Tip: Compare and Switch Smartly
In 2025, comparison websites make it easy to switch between insurers.
Check yearly if you’re getting the best deal and coverage.
A new company might offer better features at the same price.
Final Thoughts
Car insurance in 2025 is more digital and smarter than ever.
But technology can’t protect you if you ignore the basics.
Avoiding these five mistakes can save you stress, money, and legal trouble.
So, next time you renew your policy, take 10 minutes to review coverage, add-ons, and renewal dates.
Your car deserves better — and so does your peace of mind. 🚗💡
