Car insurance is mandatory by law. Driving without valid car insurance is illegal in India. In case of death or bodily injury to a third party or any damage to his car, the car insurance policy provides compensation up to Rs 1 lakh. This type of vehicle insurance is known as third-party insurance and it protects not only you but also other people or family members who may be riding/driving the car.
Comprehensive car insurance protects your car from third-party claims/damages in addition to any man-made or natural calamities such as terrorist attacks, theft, riots, earthquakes, cyclones, hurricanes, etc. At times car insurance can be confusing and difficult to understand. There are certain guidelines that should be followed by car insurance buyers while selecting a policy.
Assurance of insurance protection:
Car insurance acts like a great friend in times of crisis. It covers the damages caused in an accident and thus saves you from paying a huge amount out of your pocket. There is no benefit in any type of general insurance. It can remove or reduce the danger that has come upon you but cannot give you benefit. Insurance is a guarantee of protection, not a means of profit
Why is it necessary to have vehicle insurance?
As per the Motor Vehicles Act 1988, it is mandatory for every vehicle to have third-party insurance. This type of insurance helps to provide for the legal obligations of the third-party insured. It includes financial expenses for any bodily injury caused to another person or their vehicle in case of an accident. The insurance company handles all expenses related to compensating the third party, their property, or their family members in case of the death of the third party.
- Violation of this rule may result in:
- Suspension of the person’s driving license
- Suspension of the vehicle’s registration
- A fine of Rs. 2000 and/or imprisonment for a term of three months
- Why is vehicle insurance compulsory in India
- Road Accidents
According to the data released by the Government of India in 2017, 1290 people were injured and 405 people lost their lives every day in road accidents.
