Understanding the importance of car insurance

03 June 2019

Do I need car insurance? This is a question that most people ask, especially if they have been paying insurance premiums for many years without making any claims. Such people begin to think of themselves as safe riders who do not require car insurance and believe it to be both, an annual hassle and a financial burden, which they would much rather avoid. But the fact of the matter is that one can never predict when something unfortunate can occur. While you may be a safe rider, there is no guarantee that others are, and if you are in an accident, not having car insurance can result in some difficult consequences. So, why do you need car insurance? Let???s find out.

Why is car insurance important?

Car insurance pays for damages: It is a known fact that cars are pretty expensive. If you are in an accident due to a third party???s negligent driving skills and your car is damaged, you would have to bear the cost of repairs in the absence of car insurance. Car insurance protects you from various damages caused to the car, be it repairing a broken windshield or cost of major mechanical repairs due to collision and so on. If you have insurance, the repair costs for major damages in case of an accident are borne by your insurance provider.

Car insurance reduces your legal and financial liabilities: As per the Motor Vehicle Act of 1988, purchasing a basic third party liability insurance policy is mandatory in India. This is a policy that offers protection against legal and financial liabilities in case you cause an accident that injures a third party individual or damages his vehicle and/or property. In such a case, your insurance provider will take care of all the financial responsibilities for the treatment of the injured party, while also protecting you from the legal repercussions arising due to the incident.

Car insurance pays for your treatment as well: Another answer to the question do you need car insurance is that you are also covered by your insurance policy in case you also require hospitalisation. Let???s say you are in an accident in which you suffer some serious injuries or a fracture. Now, in such a case, you would require treatment that could last for days. If you have a valid vehicle insurance policy, you do not have to worry about these hospitalisation and medical expenses as they are borne by insurance providers.

The family of the deceased party is compensated in case of unfortunate demise: If one is in a major car accident that results in his/her death, it could result in horrible consequences, especially if the deceased is the primary bread winner of the family. In such an event, the family of the deceased would be compensated by the insurance provider.

Why has the government of India made Car insurance mandatory?

No matter how harsh it sounds, it is a fact that traffic management and infrastructure is far from ideal in the country. Lack of infrastructure makes car insurance inevitable. While negligence in driving is a major cause of road accidents, there are also regular reports of pot-holes causing traffic jams, bridges collapsing and vehicular damage. As is evident from these points, there is a lack of safety practices which increase the risks of road accidents.

India unfortunately ranks high in the list of countries known for road fatalities and death. Add to that the fact that the purchasing power of individuals is increasing by the day and more and more people are becoming vehicle owners with every passing day, while the state of infrastructure remains unchanged. As a result, vehicle owners are exposed to more risks. This situation itself should answer the question why do I need automobile insurance.