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If you own a car, Auto Insurance is not just an option—it is a Legal Necessity!

Friday, January 24, 2014 | Category : General Insurance | 1 Comments
When you buy motor insurance, it means you are protecting your car financially against any future damage that it may be subjected to. Protecting your vehicle financially would mean any losses will be taken care of in such a way that you are not financially affected. Your car might meet with any damage, accident or may be lost or stolen. In such situations, the losses borne by the owner may be compensated by the insurance company if the same is covered under motor insurance policy.
 
Motor Insurance is not optional, it is mandatory. It is mandatory because – a) it is illegal to drive without one and b) accidents are beyond control and every person needs to be protected against these risks. All the vehicles operating in public places must have valid car insurance policy at least to cover third party liability. It means that a car insurance policy must cover the third party in case of any accident. It may or may not cover the damages of the owner of the car. 

As a financial safety net motor insurance covers - 
a. Bodily injuries to yourself or others
b. Loss of wages due to injury
c. Benefits to survivors when an accident results in death
d. Lawsuits brought against you as the result of an accident
e. Repairs made to your car due to damage caused in an accident

Any vehicle, be it for personal or commercial use should be insured. Motor insurance companies come with various beneficial plans for different types of vehicles, be it four wheelers, two wheelers or commercial vehicles. 

Broadly motor insurance are of two types: 
1. Third party liability coverage: This policy covers only damages of third party in an accident occurred in a public place, for which the owner is liable, and not the owner’s damage. Here, third party is referred to people travelling with the insured or whom the insured person injures. These third parties may claim for damages caused by accident.

2. Comprehensive plan: Under this policy, you, your car and people travelling along with you and others who may suffer injury or damage, are covered against damages arising from unforeseen calamities. This makes it a better option to go for this particular policy. 

Buying motor insurance can be confusing for many people as there are several policies and choosing one is an arduous task. Given below are few points that one should check while buying car insurance: 

1. Compare and pick the right type of insurance plan – The first step towards buying insurance for your car is selecting the right plan that matches your requirements. 
  
2. Add on covers – You can enhance the protection by opting for Add-on covers. However, you should buy them only when you feel the need to. There are a slew of common insurance add-ons such as Zero Deduction/depreciation etc. offered by various motor insurance companies.   

3. No-Claim Bonus – When you buy car insurance, the policy documents mention a no-claim bonus. If you do not make any claim during the previous year, the insurance company will offer you a discount on the premium for the next policy year. 

4. Voluntary Excess – Voluntary Excess is the amount you are ready to absorb when you make a claim. As and when you choose a voluntary excess option, you can easily decrease the premium on own-damage upto 35%. 

For you, your car/vehicle is a prized possession and you always want to enjoy it. It is one of the most expensive things you own. Insurance protects this asset and helps you in coping with the financial loss, without burning a hole in your pocket, thus ensuring everlasting financial aid and happiness. 


Disclaimer: 
Views as are mentioned in the article are personal views of Author and are not necessarily the views of the Company, its Director and Employees who are in no way connected to these views. 


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