Hello, just thought I'd add some information if anyone is planning to move to Mumbai--where my family and I are now.
We have a company car and driver which saved us a lot of headaches. However, many expats buy their own cars (or 2nd car if first one is company car for spouse), but employ a driver. I suggest employing a driver for a few reasons:
1) If you have an accident, it can get ugly. Crowds tend to gather quickly and if there is an injury involved, the driver can at least speak the language and keep things calmer. Our company told us not to drive ourselves for safety reasons.
2) Traffic is some of the worst I've ever seen and you can at least close your eyes and ignore it when being driven around. Your nerves will be shot otherwise. It can easily take 1.5hours to get from the northern suburbs to the city one way.
3) Parking is a nightmare. I don't know any expats without a driver. Even locals employ them for the same reason. There are a few places you could drive (malls, Hypercity), but you'd be hard pressed to find parking anywhere else.
4) Get yourself a taller car. When monsoon comes, it's better to be ABOVE the water than down with it. There are many Mahindra Scorpios that work well. Unfortunately, we got our stolen 2 wks after moving here and got stuck with a Skoda Octavia. It is doable with a sedan, but the taller 4x4 would make me more comfortable
Typical pay for drivers depends mostly on their language skills. We pay our non-English speaking driver Rs8500/mo for 7:15am-7:15pm and then offer our driver 100Rs for up to 2 hrs later and up to Rs500 if he works really late. It's a bargain and our driver is punctual and has never called in sick. You want to be tight with $$, they'll do the bare minimum for you.
I don't have any information on car insurance.
Hope this helps and would think this applies to all over India. PM me if anyone else has questions.