Motor insurance in India has undergone major changes in the last few years. With rising road traffic, new digital systems, and stricter government regulations, the rules for buying and renewing motor insurance have become more structured and transparent. Whether you own a bike, scooter, car, taxi, or commercial vehicle, understanding the latest rules and premium slabs is essential.
In this detailed guide, we will cover:
✔ Latest motor insurance rules in India
✔ Updated premium slabs (2025)
✔ Key changes every vehicle owner must know
✔ Best motor insurance companies in India
✔ Claim process & settlement factors
✔ And finally, FAQ with clear explanations
1. New Motor Insurance Rules in India (2025 Update)
India’s insurance regulator IRDAI has introduced several reforms to make motor insurance easier, more flexible, and customer-friendly. Here are the most important changes:
No mandatory long-term third-party policies for new vehicles
Earlier, 3-year (cars) and 5-year (two-wheelers) TP policies were compulsory.
Now, buyers can choose 1-year TP + 1-year own-damage (bundled) policy as per their preference.
New premium slabs based on city category & vehicle segment
Premiums are now decided using:
Engine capacity
1Fuel type Safety rating of vehicle
City category (Tier 1, Tier 2, Tier 3)
Past claim history
✔ Pay-as-you-drive / pay-how-you-drive introduced
This is a major new rule.
Your premium depends on:
Driving behavior Total kilometers driven
Time of day/night driving Acceleration & braking pattern
This benefits safe drivers with lower premiums.
Compulsory personal accident (PA) cover revised
IRDAI has kept ₹15 lakh PA cover mandatory, but now users can buy it only once and link it to multiple vehicles.
No-Claim Bonus (NCB) rules made flexible
NCB is now transferable across insurers and vehicles.
You can carry NCB even if:
You sell your vehicl You switch to a new insurer You upgrade to a new vehicle
Online self-inspection allowed
During renewal, inspection for break-in policies can be done through video + photos via insurer app.
2. Updated Motor Insurance Premium Slabs (2025)
Premium slabs differ for third-party (TP) and own-damage (OD) components.
Here is a simplified structure:\
Car (Private Car) Third-Party Premium Slabs
Engine Capacity TP Premium (Approx.)
0 – 1000 cc ₹2,100 – ₹2,300
1000 – 1500 cc ₹3,800 – ₹4,200
Above 1500 cc ₹7,500 – ₹8,200
Two-Wheeler TP Premium Slabs
Engine CC TP Premium
0 – 75 cc ₹480 – ₹560
75 – 150 cc ₹650 – ₹780
150 – 350 cc ₹1,200 – ₹1,350
Above 350 cc ₹2,700 – ₹2,900
Commercial Vehicles (Goods Carrier) Premium Slabs
Premium depends on load capacity.
Small carriers cost less; heavy trucks cost more.
GVW TP Premium
Up to 7500 kg ₹16,000 – ₹18,500
7500 – 12000 kg ₹22,000 – ₹26,000
Above 12000 kg ₹35,000 – ₹50,000
Types of Motor Insurance Policies in India
✔ Third-Party (TP) Insurance
Mandatory by law.
Covers: Damages to third party vehicle
Injury death of a third party
Legal liabilities Does not cover your own vehicle.
Comprehensive Insurance
Includes both TP + OD (own damage).
Covers:
Theft Fire
Flood Accidents
Natural disasters
Vandalism Most recommended.
Add-On Covers (Optional but useful)
Zero Depreciation Engine Protect
Return to Invoice Consumables Cover
Roadside Assistance Tyre Protection
4. Best Motor Insurance Companies in India (2025 Ranking)
These companies rank highest in:
✔ Claim Settlement Ratio (CSR)
✔ Customer satisfaction
✔ Cashless garage network
✔ Pricing
Top Performers
1️⃣ HDFC ERGO General Insurance
2️⃣ ICICI Lombard General Insurance
3️⃣ Bajaj Allianz General Insurance
4️⃣ Tata AIG Insurance
5️⃣ New India Assurance
6️⃣ SBI General Insurance
7️⃣ Digit Insurance
8️⃣ ACKO Insurance
9️⃣ Reliance General Insurance
🔟 Oriental Insurance
5. Motor Insurance Claim Process (Step-by-step)
✔ Step 1: Inform insurer within 24 hours
Can be done on app or toll-free number.
✔ Step 2: Submit photos/video of vehicle damage
Digital self-survey is allowed.
✔ Step 3: File FIR (if accident involves injury/theft)
✔ Step 4: Get cashless repair at partner garage
Company settles bill directly.
✔ Step 5: Pay compulsory deductibles
And drive home your repaired vehicle.
6. Important Tips to Reduce Your Motor Insurance Premium
✔ Choose higher voluntary deductible
✔ Install anti-theft devices
✔ Maintain clean driving record
✔ Do not make small claims (to retain NCB)
✔ Compare insurers online
✔ Choose long-term policies for discounts
Conclusion
Motor insurance rules in India are becoming smarter, digital, and more transparent. The introduction of driver-based premiums, flexible NCB, and online inspections makes policies more customer-friendly. With 6,500+ garages and dozens of insurers, Indian users now have more choices and control over their insurance experience.
Whether you are buying a new car or renewing an old one, understanding the new rules and premium slabs helps you save money and choose the right insurer.
Motor insurance is not just mandatory — it is protection for your life, vehicle, and financial safety.
FAQs – Motor Insurance in India
- Is motor insurance mandatory in India?
Yes, under the Motor Vehicles Act, third-party insurance is compulsory for every vehicle.
- What is Zero Depreciation cover?
It ensures the insurer pays the full cost of replaced parts without deducting depreciation.
- Can I transfer my NCB to a new vehicle?
Yes, NCB is linked to the owner, not the vehicle. You can transfer it across vehicles and insurers.
- Which company offers the cheapest motor insurance?
ACKO, Digit, and SBI General often provide the lowest premiums, but overall value depends on coverage + CSR.