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Why every car owner should have valid car insurance policy

Motor insurance
Auto insurance has two components, the third party insurance (or liability) and the second component is self-injury. Here I explain to your car damage first. If an accident has occurred or if it has been stolen, then part of the damage covers the cost of repairing or restoring your vehicle. Most of us are not wealthy enough to cover these costs, so we opt for insurance. However, such coverage is not mandatory, and you are free not to take such insurance. If your vehicle is more than eight years old, any repairs will charge depreciation and you may not want to take this aspect of coverage in some situations.

Third-party insurance is the second part of auto insurance. In most countries, including India, it is mandatory. If the driver causes injury or death to any unrelated person during the operating of your vehicle, the owner of the car is legally obligated to pay for it. The payment provided depends on the income of the injured/deceased person. Not everyone has enough money to pay now. Most countries (including India) have made third-party auto insurance mandatory to avoid situations where appropriate reassessment cannot be done. The car owner pays the coverage and the insurance company pays any third party liability.

Auto insurance is vital because it allows someone to compensate for someone else for their legal liability for bodily injury/death or property damage.

Auto insurance is a secure means of transferring risk. You can pay your legal liability to the corporation with a large sum of money and cover your assets for an annual premium. Without it, people may not be able to fulfill their legal obligations financially. Auto insurance provides a cheap means of transfer for most people's legal liabilities.

Coverage for physical damage is essential because it responds to collisions and other hazards such as fire, theft, hail, and vandalism. This type of protection is usually optional unless someone has a financial interest in your car, which is why auto insurance is essentially necessary to protect the investment of a lienholder/lessor.

Following are some significant reasons why every car owner should have valid car insurance policy:

  • Under Section 146 of the Motor Vehicles Act, 1988, a third-party liability insurance scheme is mandatory in India. The Act creates coverage, whether its uses for the public, family, domestic, commercial, or recreational purposes, mandated for each vehicle.
  • Third-party car insurance policies cover the policyholder against legal and financial liabilities arising due to death, bodily injury, or damage to property owned by a third party while driving the car. It does not cover expenses on car repair and damage or injuries to the driver.
  • A comprehensive insurance plan is recommended for car owners as it provides a broad scope of coverage that also includes third party risks.
  • In India, driving without a valid motor insurance scheme is a law-abiding offense and can result in a fine of up to Rs 1000 or imprisonment for up to 3 months. Depending on the case, a driving license and certificate of registration (RC) may also suspend.
  • Whenever the law officer in question makes the demand, the person behind the wheels is responsible for producing the certificate of vehicle insurance.
  • Rule 141 of the 1989 Central Motor Vehicle Rules allows all insurance companies to issue insurance documents, regardless of whether a person is purchasing a new insurance policy or renewing their existing motor insurance policy.
  • A comprehensive car insurance policy protects you from uncontrollable natural and human-made disasters.
  • A car insurance policy provides financial assistance to the insured to cover medical costs, vehicle repair costs, third-party liability, etc. In case of death or disability to the policyholder, his / her family will receive compensation according to certain conditions.
  • Many insurance companies provide additional facilities that make coverage easy and convenient, such as cashless garages and roadside assistance.