Summary of this article
Motor Insurance Coverage: With car showrooms buzzing this festive season, new buyers often rush into dealer-linked insurance without comparing their options. Experts say that choosing the right motor insurance cover, along with suitable add-ons like zero depreciation, return-to-invoice, and roadside assistance, can make a big difference in both cost efficiency and claim experience.
The festive season is all about celebrating new beginnings, and for many, it means buying a new car. Shoppers also look forward to festive deals and discounts to make the best of the bargain. This year, though, there is more to cheer about. The government, last month, revised the Goods and Services Tax (GST) on automobiles, which has pumped up the festive sales of cars.
GST rates have been brought down from 28 per cent to 18 per cent on small cars (≤1,200cc petrol, ≤1,500cc diesel, ≤4m length) with effect from September 22, 2025. This has resulted in price reductions for most cars, with manufacturers passing on the benefits to buyers in order to boost sales.
But one key aspect that often gets overlooked during car buying is motor insurance. According to Paras Pasricha, head of motor insurance at Policybazaar, an online insurance marketplace, the festive rush is when many buyers commit some of their costliest insurance mistakes.
“The most common error is accepting the dealer’s bundled insurance policy without comparison,” says Pasricha. Dealers typically have tie-ups with select insurers, and their quotes can be higher than what’s available online.
“When you compare plans yourself, you get access to better prices, a wider choice of add-ons, and features like claim assistance, garage networks, and faster processing,” he adds.
Ignoring some key protection parameters can lead to surprises later, especially at the time of claim.
Here are a few things you should not overlook while buying an insurance policy for your car:
Insured Declared Value (IDV)
Deductibles
Relevant add-ons
For instance, the IDV determines how much compensation you will receive in case of theft or total loss. Underinsuring the car to save on premium could mean a much smaller payout in case of theft or damage.
This year, there is also a noticeable uptick in demand for long-term comprehensive policies, particularly the 3+3-year plans that combine both third-party and own-damage coverage.
“Long-term plans are gaining traction because they are more cost-effective. You can save about 10-15 per cent compared to annual renewals, and you get your No Claim Bonus (NCB) benefit upfront for the full term,” Pasricha adds.
Beyond convenience, these plans also ensure uninterrupted protection. Many vehicle owners forget renewals or miss deadlines, which can lead to a lapse in coverage and even claim denial if an accident happens during that period.
Add-on covers are another crucial part of the discussion this season. The three most sought after add-ons are:
Zero depreciation
Return-to-invoice
Roadside assistance
“Zero depreciation is a must-have for new or high-end cars, because it ensures you get the full claim amount without depreciation deductions on parts,” Pasricha says.
The return to invoice is equally important, particularly during the first few years, as it helps recover the full invoice value in case the car gets stolen or is declared a total loss.
Roadside assistance also comes handy for those who frequently drive long distances or through remote areas. This add-on also protects you from getting stranded during monsoon season, a time when automobiles are prone to breakdown in waterlogged roads.
Pasricha says they have seen strong interest in the adoption of ‘Cashless Anywhere’ service, which allows customers to settle claims seamlessly at any garage across India. This feature could be useful during festive travel in case of any breakdowns or minor accidents.
As buyers line up to make the best of festive deals, it is also important to compare the insurance options which can save both money and hassles later. A well-chosen policy with the right add-ons does not just tick a regulatory box, it also ensures peace of mind every time you take your new car out on the road.
