Car Insurance Confusion: Are You Overpaying for Protection You Don’t Need?

Car insurance is mandatory for every vehicle on Indian roads. But when it comes to choosing the right coverage, many people end up overpaying — either due to a lack of awareness or by blindly trusting dealer recommendations. Here’s a simple explainer to help you understand if you're spending more than you should.

Also Read: Auto Insurance in 2025: Smart Tips to Lower Your Premiums Without Sacrificing Coverage | Republic World

1. Which insurance should one go for?

In India, third-party insurance is compulsory. It covers damages to other people or vehicles. But it doesn’t protect your own car. That’s why many people opt for comprehensive insurance, which covers own damage, theft, natural disasters, and more.

However, a full-featured plan may not always be necessary — especially if your car is older or if your usage is limited. You may be paying for protection you don’t actually need.

2. Add-Ons: Helpful or unnecessary?

Insurance companies offer many optional add-ons such as zero depreciation cover, engine protection, and roadside assistance. While these can be useful, they are not essential for everyone. 

For instance, if your car is over five years old, zero-depreciation might not offer much value. If you don’t live in a flood-prone area, you may not need engine cover. And if you mostly drive within the city, roadside assistance may rarely be used. Therefore, choose only what matches your needs.

3. Don’t Lose Out on Your No Claim Bonus (NCB)

If you don’t make any claims in a year, you earn a No Claim Bonus — a discount on your premium that can go up to 50%. But many people lose this benefit by claiming small repairs. For a minor scratch or dent, it’s often better to pay out of pocket and keep your NCB intact. In the long run, it saves more money.

4. Buying insurance from online platforms 

Most people buy insurance through car dealers at the time of purchase. But these policies often come at a higher price. Instead, check online platforms like Policybazaar, ACKO, or Turtlemint where you can compare quotes and save significantly — with similar coverage.

5. Review your policy every year

Auto-renewing your policy without checking the details can cost you. As your car gets older, some add-ons may no longer be necessary, and the insured declared value (IDV) should be adjusted. Always compare plans at the time of renewal to get the best deal.

Key takeaways 

Car insurance doesn’t have to be complicated — or expensive. A little homework can go a long way in saving money and getting the right coverage. Don’t pay for extras you’ll never use. Make informed choices, and you’ll stay protected without overspending.