09th May 2023

Superadmin

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Why do we need car insurance?

Introduction

Don’t you plan to help yourself with the LIC policies or the medical insurance at the time of utmost need? Well, going for LIC policies and medical insurance is something that we are always concerned about. So, what happened in case of the car insurance?

Cars were once considered a luxury in India. However, with the greater disposable income of households, owning a car has become very common. Not even one car, people nowadays own two cars too which has made mobility of people easier by not depending on public transport always.

However, driving on the roads of India comes with its consequences. Due to heavy traffic, lack of legal enforcement by the road authorities, and increase in population there are increased chances of causing damage to the car, not only by our fault but also by the others. Thus there is a need to go for the car insurance coverage.

Why is car insurance mandatory in India?

There is no one particular reason to determine the importance the car insurance in India. But in the case of accidents, it saves the owner from paying hefty bills for repairs made to the car.

The car insurance policy is regulated under Motor Vehicles Act, 1988 which states that all the vehicles operating in the public space must be covered under the insurance policy. It can be either third-party insurance cover for those seeking the basic plan. The third-party insurance cover protects the owner in case of an accident that has been caused either by the owner or any other person driving another vehicle.

However, any damage caused by the owner to his car is not covered by the car insurance. Apart from it, the act states that the car’s registration documents, insurance documents, and driving license should be with the driver all the time otherwise certain consequences and penalties will be levied upon the car owner.

Also Read: How to save money with car insurance?

Penalty for not having car insurance in India

Driving a car with insurance is an offence and certain penalties are to be paid for the same. The penalties are laid down to ensure the vehicles from lumpsum bills of damage and make the citizens responsible about driving.

Under Section 81 of the Motor Vehicle (Amendment) Act, 2019, if a car has been caught without an insurance policy, then INR 2000 will have to be paid as a penalty. If the same has been occurred again then the penalty will be increased to INR 4000 or imprisonment up to 3 months or both.

Benefits And Types of Motor Insurance In India

Third-Party Liability

If not any other insurance, then one must have third-party insurance to drive his car on the road. With this insurance cover, three things are covered, viz.,

The repair or replacement of a third party’s vehicle
Hospitalization cost of the third party
Liability arising out of third party’s death.

Own Damage Cover

In the own damage cover, any damage caused to your vehicle is also covered by the insurance company by determining the insured declared value of the car.

Personal Accident Cover

Personal accident insurance cover protects you by covering your medical expenses after the accident.

Zero Depreciation Cover

This add-on to the car insurance helps you to easily replace the car parts without considering the depreciated value of the car parts at the time of settlement.

Comprehensive Car Insurance

It is a mixture of almost all car insurance, giving the highest protection to your car. It covers personal accidents, third-party liability, own damage cover, and noncollision damage (damage by storm, fire, flood).

Personal Accident Cover

Personal Accident cover adds to the protection against any kind of permanent disability or death due to an accident but for a pre-determined amount.

Damage or loss to the insured vehicle

If the car suffers losses due to burglary or theft, strikes, riots, accidents, fire, or terrorism, your insurance policy covers all these risks.

No Claim Bonus

With car insurance, the customer is eligible for every claim-free year which can be even at a discount, making car insurance more affordable.

Also Read: How to select the best insurance package for your car

Information Regarding Government Vehicle Insurance (1)

According to Section 146 of the Motor Vehicle Act, there is no necessity for third-party insurance for the government vehicles of the Center and State or any vehicle used by government officials for official purposes.

Car Insurance Rules in India

Here are some basic rules related to car insurance policies in India

For Third Party Coverage

The compensation must be made to the third party due to any loss created by the insured car and this will be paid by the insurance company.
In case of the death of a third party, the amount of compensation will be provided to the family of a deceased person concerning his net worth.
At the time of property damage, the compensation will be up to 7.5 lakhs.
All the legal liabilities will be settled by the insurance company, in case of accidents.

For Comprehensive Car Coverage

All the coverage offered under the Third Party Insurance Plan is to be provided
In case of the approval of the claim, theft coverage is also provided.
All the cost of repairing is paid by the insurer at the time of the approved accident claim.

Difference between third-party and first-party insurance

A comprehensive car insurance policy or first-party insurance protects the interests of the policyholder’s car. Whenever there is any natural calamity damage caused to the vehicle of the first part, he can file a claim with the second party for the damages incurred by him.

On the other hand, third-party car insurance is liable only for the damage incurred by a third-party person or vehicle. It can include bodily injuries, death, or damage to the third party. As the coverage is low, thus the insurance amount of the third party is also less.

Also Read: Difference between car warranty Vs car Insurance

Whether it is possible to park a car on the road without insurance

No, it is completely illegal to park a vehicle on the road which doesn’t have any insurance. Thus, it is important to go for either third-party or first-party insurance, at your convenience.

The process to get Car insurance in India

The following steps are to be made

1. Select the policy you desire

2. Choose any kind of add-ons you want in your policy

3. You can go for any insurer you want and then pick the policy

4. Thoroughly check the policy documents

5. Enter all the basic information required

6. Pay the amount

7. Keep a copy for yourself

If you want to opt for the insurance facility, then it won't be as difficult as it may seem. You only are required to have some basic knowledge about the Internet and must have the car documents handy, making your purchase easy and quick.

Conclusion

While purchasing car insurance in India, you may come across many insurance companies which might baffle you. thus to remove all your stress regarding which one should be chosen, you must go for Autobest. Autobest is the best pre owned luxury cars dealer with car insurance in India which provides you with a variety of options and all the clear information without hiding anything from their valuable customers.

FAQs For Car Insurance

Is it mandatory to have car insurance in India?

Yes, there is mandatory and compulsory insurance in India. With no car insurance, you cannot take your vehicle on the road.

What is the difference between third-party liability insurance and comprehensive insurance?

The comprehensive insurance covers the first party and the third-party liability insurance covers the third party who has been affected.

What are the benefits of car insurance?

One of the main benefits is to take a claim and protect yourself from any kind of liability which might loosen up your pockets.

Can I park my car on the road without insurance?

No, you cannot park your car on the road without insurance.

What should I check while choosing the best car insurance policy?

Affordability is one such important factor to consider. You should go for the insurance cover with less premium which should not put the burden on your pocket.