Getting your car insured

By Kshitij Anand

NEW DELHI (Reuters) - From the humble Maruti 800 to the sleek Honda City, cars have become an indispensable part of our lives.

Statistics from Society of India Automobile Manufacturers show the number of cars on Indian roads grew by 1.3 percent in the last fiscal year.

The process of buying a car does not end with getting it out of the showroom -- insurance is a vital part of car documentation.

"In India as per the Motor Vehicles Act, it is mandatory that a vehicle has to be insured with at least third party cover before it is driven on the road," says Vijay Kumar, head of Motor Insurance at Bajaj Allianz General Insurance.

Growing at an average of 17 percent over the past few years, the car insurance sector has a turnover of 1,650 billion rupees and provides employment directly or indirectly to more than 13 million people.

As per the Insurance Regulatory and Development Authority (IRDA), motor insurance claims were to the tune of 90 billion rupees in 2007-08.

But the industry did feel the effects of the global slowdown, particularly when it came to insuring new cars.

"This has left insurers chasing renewals of older vehicles in the market," said Kumar.