Why Car Insurance is Important? Here’s All You Need To Know

why car insurance is important

When you purchase a car, another important commodity to buy along with it is the car’s insurance. Car insurance gives us financial protection for damages from any unforeseen accidents. The security you get from buying car insurance is not just a worthy investment but also a logical option when you are making a bigger investment when you are buying a car.

Motor Vehicles Act, 1988

The Motor Vehicles Act of 1988 defines the legal provisions applicable to the registration of a vehicle, the driving license of a vehicle owner and also the mandatory insurance required for a vehicle. This act is what makes it necessary for us to have third party liability insurance coverage at the least.

Central Motor Vehicle Rules, 1989

The Central Motor Vehicle Rules of 1989 requires the insurance company to issue a certificate for all policies in addition to the policy documentation.

Whether you are driving a private car or a commercial vehicle, this insurance certificate is one of the mandatory documents to be carried with you at all times.

Whenever required, you will be required to present the certificate of insurance, driving license, and the Pollution Under Control (PUC) Certificate of the vehicle.

Consequences of Not Having a Car Insurance

  • Legal punishment from a fine of Rs 1000 to a prison term of 3 months.
  • Your driving license could be suspended.
  • Suspension of your vehicle’s registration.

Importance of Car Insurance

One can say that these are more than enough reasons to buy car insurance. However, apart from this, there are a few more reasons for insuring your car.

Reduced Liability

Third-party liability insurance protects the car owner from the following incidents:

  • Coverage against legal liabilities to a third party in an accident.
  • Coverage from third party injuries/death.
  • Damage coverage to third party property.

Thus the insurance covers all the damages caused by the accident and saves them from legal repercussions.

Hospitalisation Coverage

Some car insurance plans offer personal accident cover for the driver along with the third-party liability insurance plan. This will include minor or serious injuries that the driver/owner experiences during an accident. The insurance company will cover any hospital stays if they are required. There are packages that include financial compensation to the family of the insurance holder if he does not recover from his accident.

Comprehensive Car Insurance

A comprehensive car insurance policy is one that offers an own-damage cover along with the third-party cover. Even though this is not mandatory to be bought, it is advisable as it protects the vehicle from burglary, theft, in-transit damages when in-transit by rail, inland waterways, air, road, or lift, accidental damages, man-made disasters like riots, strikes or terrorism, natural calamities, etc. The insurance holder is also provided with coverage from injuries or death due to accidents.

Buying a comprehensive insurance plan online is cheaper than going through a salesperson as it reduces the operating cost for policy sales online. Furthermore, it is also easy to renew the insurance policy online and very less paperwork.

Benefits of Car Insurance

The update in the Motor Vehicle Act 2019 has made it mandatory for all car owners and drivers to be aware of all the various factors that affect your ownership and use of an automobile. Insurance of the vehicle is one of those factors that is not just mandatory to be paid for during the purchase of the vehicle.​​​​ It is wise to be aware of what your policy provides you coverage for.

These are the benefits to having your car insured:

  • The insurance provider will pay for all the expenses repairs if the car meets with an unfortunate accident. Repayment sum will only be a percentage of aggregate repair expenses and is liable towards the insurance policy term.
  • As we already discussed, it also provides the owner or driver with personal accident insurance, if they face permanent disability or death. Although if the affected owner also has a life insurance policy, then the car insurance may not cover any permanent disability.
  • All types of 3rd party liability arising from an accident will be covered. Property/injury/death of involved 3rd party in the accident may require the person at fault to lawfully face the insurance provider to pay-off for the damages caused by them.
  • Apart from the basic coverage, the insurance policy can also offer extra coverage such as loss of use, downtime insurance, zero deprecation guarantees, no claim rewards, etc.
  • Some insurance providers maintain a large network of garages where you can get cashless service for your repairs that come under policy cover.

What Should You Consider While Choosing an Insurance Provider?

  • Definite policy terms, the premium charges, add-on covers, claim settlement procedure will differ from one company to the other. All these details are easily accessible online for most trusted insurance providers. We can calculate the premium of car insurance online and get instant results for the amount of premium we will be required to pay for the vehicle of our choice just by entering the make, model, and year of manufacturing. That is all that is required by the site to calculate the actual insurance premium.
  • You can also find discounts on the premium from different insurance providers. So make sure you research well and find out a policy that suits your requirements and benefits you in the long term.
  • Check which company provides you with a quick and painless process of buying a car insurance policy. Make sure the entire process is simple, quick, and convenient. Also, choosing a company that offers the added convenience of purchasing and renewing the policy online is better.
  • Choose a company that has good customer support. We need trained and experienced personnel who are available to resolve all our queries on time. Some insurance companies also offer live chats to ensure our queries are resolved without delays.

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