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Why is Car Insurance Important?

Posted by aditya.sehgal
January 22, 2018

NOTE: This post has been self-published by the author. Anyone can write on Youth Ki Awaaz.

Car insurance is essentially a means to cover you and your vehicle against accidental damage. Therefore, with a car insurance policy you can drive on the roads safely, and without worry. There are several reasons why getting car insurance would be a good idea. Lets have a look at why should you purchase a car insurance:

  • Pays for damages

  • Reduces liability

  • Pays for hospitalisation

  • Costs less online

  • Compensates your family if you die in an accident

Many factors have contributed to an increase in disposable cash among middle class families. There have also been many efforts to make automobiles easier to buy; for e.g. the reduction of tax rates on purchasing cars under GST. All this has led to an increasing number of cars on Indian roads.

However, when you buy a new vehicle it is equally important to get a car insurance policy. This is necessary because other people may not follow traffic rules (even if you do), which can result in minor or even major accidents.

This in turn will force you to pay quite a bit for repairs and/ or hospitalisation, setting you back considerably. In such a situation, car insurance would come as a real blessing.

What Is Car Insurance?

Car insurance (or motor insurance) is essentially a means to cover you and your vehicle against accidents. You pay a regular premium to the top car insurance company of your choice, for which they will provide you financial assistance in case of damage to you or your vehicle due to an accident. Thus, a car insurance policy allows you to drive without worry.

There are two types of car insurance available in India:

  1. Comprehensive Cover: It covers you and your car against physical damage, theft, property damage, etc. Moreover, comprehensive car insurance comes with no claim bonuses, zero depreciation covers and so on.

  2. Third Party Insurance: Third party liability car insurance is mandatory for cars driven in India. It protects you from having to pay the liabilities of the third party involved in an accident, you may have caused.

Why Is Car Insurance Important?

There are many reasons why availing a new car insurance policy along with your new vehicle is a good idea. Here are the top 5:

  1. Pays for Damages: Purchasing and repairing cars is an expensive business. This makes availing a motor insurance cover a good idea, since it will pay for the damages caused to you and your vehicle by an accident.

  2. Reduces Your Liability: The third-party motor insurance cover will protect you from the legal consequences of an accident caused by you, and help you pay off any damages to another person’s property as well.

  3. Pays for Your Hopsitalisation: If you or your co-passengers get severely injured in an accident and need to be hospitalised, your car insurance cover will pay for the hospitalisation.

  4. Costs Less When Purchased Online: Buying car insurance online results in a lesser premium for the same. This is because the insurance company saves money through online transactions and the lack of a broker, which they pass on to the customer. Online purchase has many other benefits as well.

  5. Compensates Your Family After Your Death: In the case of an unfortunate demise in a car accident, your family might not be able to hold up financially. However, a motor insurance policy can offer a sum assured that can help your family financially even in such an unfortunate scenario.

Remember though that choosing the best car insurance policy for you is not easy. It is important to compare the policies- their costs, benefits and conditions. Be sure to read and understand the policy documents carefully before purchase to find one that suits your needs and requirements.

Additionally, you can also approach non-banking financial corporations (NBFC) like Bajaj Finserv to purchase insurance, instead of going directly to companies. Since these NBFCs sell multiple car insurance options, you can do the comparison there and find the best car insurance for yourself.

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