Do people often wonder as to why they need to have car insurance for their vehicles? Most of us feel that we are forced to buy it, even though it is compulsory. Well, it turns out that there is more than meets the eye. Driving a vehicle in any country requires certain legal requirements that you have to fulfill before you can drive on a public road. Having a car insured is one of the requirements. Chapter 11 (Section 145 to 164) of The Motor Vehicles Act, 1988, makes it mandatory that you must have at least a third-party insurance coverage on your vehicle. In this article, we will understand why having car insurance is a requirement and what it has to do with road accidents.
Liability in an accident
In an unfortunate event of a road accident, where there is a fatality or injuries involved to the parties, your car insurance comes into the picture. If you have third-party insurance, then you can simply approach them to compensate the third party. However, if you do not have third-party insurance, then you will have to bear the brunt of the damages involved and the Motor Vehicle act also invites certain criminal penalties in that case. It is estimated that almost 400 people get involved in road accidents on a daily basis. This is a relatively large number to ignore, you just can’t depend on your luck and hope that no accident will happen to your vehicle.
Peace of mind
Car insurance provides peace of mind, and you don’t have to worry about any sudden financial hit in an unfortunate event. With comprehensive coverage, you can get your own car repaired at much ease. Nowadays, you also get zero depreciation insurance plans, in which the whole cost of repairs is covered by the insurance provider itself, instead of some percentage of the whole repair cost otherwise. It can be compared to a small investment plan where you pay now and save later. On average, a vehicle does get damaged in an accident at least once in its lifetime of a vehicle. Your insurance just provides a basic umbrella to these unwanted sudden expenses.
Our Indian roads are very dangerous, and we see road fatalities almost on a daily basis. The most dramatic and tragic outcome of a road accident can be the car owner’s demise, and it can be a huge bolt from the blue for a family, who has just lost their only breadwinner. This can almost disrupt a settled family. But most car insurance these days provides this extra coverage, and they provide compensation to the family members of the demised person. This can also be taken as an add-on through almost all the insurance service providers.
No claim bonus
If you regularly get your car insured every year, then you collect what is called a no-claim bonus. A no claim bonus is a kind of reward point or an incentive that the insurance provider gives in case you do not make an insurance claim during the duration of the insurance. With this claim, you can have a huge rebate on your next car insurance purchase and if you are buying a new vehicle you can use your existing bonus to save up to 50% on the insurance of your new vehicle. The discount becomes significant if you are buying a luxury vehicle where the insurance costs run into 6 figures.
So in the end, it is clear that having car insurance is not only a legal requirement, but you get a slew of advantages if your vehicle is insured. In most of the tier 2 towns, where road rules are not implemented strictly, it is not uncommon to find uninsured vehicles. But a sudden road accident can almost make you bankrupt, and not to forget the criminal penalties involved. So it is better to have your vehicle insured than to depend on your stars. Not only will it save you money in the long run, but will also make you a responsible driver.