A road accident not only causes damage to the vehicles involved but also may lead to serious injuries, and consequently heavy medical bills. In India, road accidents are a huge cause of concern. Our country accounts for 6% of the globally reported incidents of road accidents. To help people stay protected against the financial implications of a road accident, motor insurance has been made compulsory in India. As per the Motor Vehicles Act of 1988, every motorist in the country needs to have at least basic third–party liability insurance.
Now, you may wonder why vehicle insurance is compulsory. Let’s find out.
Why is Vehicle Insurance Mandatory?
Provides financial coverage against third–party liabilities
This is one of the main reasons why car insurance is mandatory in India. A motor insurance policy provides the vehicle owner financial protection against the damages incurred by the third–party in an accident. This includes property damage and injury to the third–party. If the third–party raises any claim for damages, the insurer covers these claims under a third–party motor insurance plan. As these claims can sometimes run into lakhs of rupees, having a motor insurance can prove to be immensely helpful.
Protects the third–party’s interests
If a third–party suffers from severe injuries that leaves them unable to work, they may not be able to provide for their home. This can be a huge problem for someone who is the sole breadwinner at home. And if you do not have the funds to pay for their claim, both parties can run into a huge financial mess. The presence of motor insurance coverage ensures that the third–party stays protected in any unfortunate incident without you having to worry about paying the claim amount.
Ensures personal accident cover
The other reason why vehicle insurance is compulsory is that when you buy coverage, you also need to take a personal accident cover too. This requirement is applicable with both a third–party motor insurance policy and a comprehensive car insurance policy. So, you also end up protecting yourself against your own medical bills in the event of an accident.
Provides peace of mind
This is one of the most important reasons why vehicle insurance is mandatory. If your car is protected by adequate coverage, you can get peace of mind knowing that you will be financially protected against any possible liabilities after an accident. Since the road can be very unpredictable, a comprehensive vehicle insurance offers peace of mind.
Benefits of Comprehensive Car Insurance
Though only third–party vehicle insurance is mandatory, motorists often opt to go a step further and buy comprehensive insurance. If you buy a comprehensive car insurance policy, you get covered against third–party liabilities, own damages, natural calamities, and man–made disasters. You also get to add various riders to your insurance plan. These riders help you to customise the coverage you receive as per your needs. Some of the most popular riders are the consumables add–on, zero–depreciation cover, engine protect add–on and the return to invoice cover. Thus, a comprehensive car insurance policy will help you get extensive and customizable insurance coverage for the damages caused due to unforeseen circumstances.
So, go ahead and buy the coverage you need to stay legally compliant and financially protected on the roads.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.