Why Is Buying Motor Insurance Essential in India?

Motor vehicles are a very crucial part of our day-to-day life. From getting to and from work to going out for activities and leisure, our vehicles are our trusted friends. It is not a stretch to say that almost everyone relies on vehicles in today’s world. So what happens when this trusted mode of transport is damaged? Well, life gets difficult.

First, you have to look for a different mode of transportation. Then you also have to pay heavily for the repairs. If the vehicle has been totalled, you have to look into buying another vehicle. However, it does not end there. If your vehicle has been damaged or totalled due to an accident, you might also be liable to pay for the injured people, including damages to their property.

While all of this is very difficult to deal with, there is one way to ensure that you do not have to shoulder all the burden, especially the financial one. It is through having a comprehensive motor insurance policy. While it is legally mandatory in India, there are several other reasons for having a motor insurance policy.

Law Mandate

The first and foremost reason for having a motor insurance policy in India is that it is legally required. Having minimum motor insurance coverage ensures that you comply with the laws. Not having the law-mandated motor insurance policy will result in fines and penalties that may escalate to jail time and vehicle impounding. The fine for first-time offenders is set low at INR 2,000 as this is just to warn the driver.

However, in cases of repeated offences, it can go up to INR 4,000 or even three months of imprisonment. In addition to this, there might be vehicle impoundment, license suspension or revocation, and even issues with renewing your vehicle’s registration or getting other official permits. You can easily avoid all of these by having your motor insurance policy.

Financial Security

While having minimum insurance ensures that you comply with the law, having comprehensive motor insurance gives you financial security. While many people avoid having comprehensive coverage, given the reason that they are safe drivers, take good care of their vehicles, and have even put in place several safety features, which means that they will not get into an accident, neither is their vehicle under threat of theft or vandalism.

However, they fail to realise that accidents usually happen for reasons not in the hands of the people who are driving. Similarly, they cannot control things like natural disasters or intentional vandalism. There is so much that is not in your hands. Therefore, it is crucial to get comprehensive insurance, which is in your hands.

Third-party Liability

While no one wants to get into an accident, sometimes people do. And when they do, unfortunately, there is a lot of damage. If the damage is only to you and your property, you can still deal with it. However, if other people and other people’s property are involved in the accident, it will raise third-party liabilities.

Such liabilities can result in police complaints and lawsuits. The general claims under third-party liabilities are for injuries to people and property damage caused by the accident. The amount claimed under such liabilities can be massive, and without a comprehensive insurance policy, they will result in financial burdens too heavy to shoulder.

Cover in case of demise

The worst thing that can happen in a motor accident is the demise of a person. Unfortunately, this is more common than one would like to admit. Many people lose their lives on the road. What is worse is that such people were not even at fault for the accident; they were just in the wrong place at the wrong time. The compensation given to the deceased’s family aligns with their financial standing and contribution to their family.

Generally, it is even adjusted for probable growth opportunities. While money cannot replace a human being, and anything you pay to their family is not enough, the amount can be too high for the paying party. But if you have a comprehensive motor insurance policy, you don’t have to worry about it, as the insurance company will take care of it all for you.

FAQs

• What happens if you don’t have vehicle insurance in India?

Driving without valid motor insurance in India can lead to fines, license suspension, vehicle impoundment, or imprisonment for repeated offences.

• Which insurance is mandatory for vehicles in India?

Third-party liability insurance is legally mandatory in India, covering injuries or damages caused to others in an accident involving your vehicle.

• Can you transfer insurance when buying a second-hand car?

Yes, insurance can be transferred to a new owner, but it requires timely documentation and approval from the insurance company within 14 days.

• Is comprehensive car insurance worth it for old vehicles?

Comprehensive insurance is useful for old cars, too, as it covers theft, damage, and unexpected repairs, which are more common with ageing vehicles.