The Necessity of Car Insurance in India

Whether you buy a vehicle for your own personal use or for commercial use, you need to make sure that it is covered by at least the minimum required car insurance. In India, a car insurance policy offers car owners a number of benefits, but that is not the only reason why your vehicle should be properly insured.

About Car Insurance

Car insurance, or motor insurance, is a contract between you and an insurance company that serves to protect your vehicle from a number of unforeseen risks. It is basically a protection against numerous losses that may be incurred as a result of theft or financial losses that occur because of an accident and any subsequent liabilities. You also have the option to purchase car insurance online, and the scope of coverage can be extended to you, the insured party, the vehicle under insurance, and to third parties. The premium that you have to pay for car insurance online depends on a number of factors, like the age of the car, its market value, the city where you reside, the type of coverage opted for, etc. The most important benefit of having proper car insurance is the fact that it gives you the confidence to drive with peace of mind. But, apart from this, there are several other reasons why it is necessary for you to have proper motor insurance in place:

It is a Mandate by Law

According to the Motor Vehicles Act or 1988, it is compulsory for every car owner to have at least a third party liability cover for his car before he can drive it on the road. A basic third party liability car insurance policy protects the driver-owner from any liabilities that may arise from an accident where a third party or third party property sustains damage. While this cover is the minimum mandated by the government, it is always a better idea to consider comprehensive motor insurance plans in order to safeguard your vehicle in case of its own damage due to an accident.

Damage to the Insured Vehicle

Elaborating on the point mentioned above, if your car suffers any damage during a collision or accident, the expenses that you may incur to get the car fixed are reimbursed by the insurance company. On the other hand, if your car suffers from damage in a non-collision related scenario, where the damage is caused by natural or man-made calamities like a storm or riots, you can still claim for reimbursement for the expenses of fixing the car.

Loss of Vehicle

In case your car is stolen, you will get compensation from your insurance company. You will, of course, have to submit an FIR for the same before you can put in a claim. Once the police give a ‘No Trace Certificate’ which claims that your car cannot be traced, you can get compensation for your stolen car. Please note that the amount you will get as reimbursement will not be equal to the price of a new car, but the IDV of your car.

Third-Party Liability

Insurance is a contract between you and the insurance company, and anyone else that is involved in an accident is referred to as a third party. Your car insurance policy, regardless of whether it is a liability only cover or a comprehensive cover, covers your legal liabilities for compensations that have to be paid because of an accident that was caused by your vehicle. This coverage includes liability for death or injury to third parties. Here, the third party can refer to any pedestrians, outsiders, occupants of other vehicles, etc.

Add-On Covers

You can choose from a large variety of add-on covers to enhance the overall coverage of your motor insurance, depending on your needs. For example, you can choose a roadside assistance cover that will allow you to avail assistance services in case your car breaks down; while this is an important and beneficial cover, it is especially important if you regularly travel long distances, or if you travel to far-flung areas. Other covers that you may choose from include zero depreciation cover, engine cover, no claim bonus retention, etc.

With the option to buy car insurance online, the entire process has been made quite convenient for customers; and there is no doubt that in India, having a car insurance policy in place is a necessary step for any car owner to drive with complete peace of mind.

**To understand exactly about the policy coverage, exclusions etc read the Policy Wordings carefully.**