What is car insurance?
Everyone dreams of having a car. It is a luxurious and a comfortable way of transport and now-a-days it is quite simple to buy a car in India. If you want to enjoy the major things in life, then a car purchase would be definitely on your bucket list. When you start driving a car, then you must also need to be insured. Accidents may happen, so it’s better to know that you’re covered financially for the car you buy. Thus by having car insurance is essential because it covers the expenses in such events.
Car Insurance protects the owner of the vehicle against damage occurred due to accident. In India, “The Motor Vehicles Act of 1988” requires all vehicles used for either social, domestic or pleasure purposes to be covered by the valid insurance. The owner of the car is legally liable for any injury or damage to life or property caused by usage of the insured vehicle. In India, having a car insurance plan is not an option but it is an obligation. It is very important to have active car insurance policy at all times if you have a car. So, if you want to purchase a car, buying car insurance plan is also mandatory.
Under the provisions of “The Motor Vehicles Act of 1988” this Act, driving motor vehicles in public places without any third party insurance is a punishable act. Hence, Third Party Motor Insurance for vehicles is a statutory requirement. A third-party car insurance is a type of four-wheeler insurance that offers financial protection/coverage to you in case there were damages or injuries caused by your car to another person or their property.
Why to buy Car Insurance Plan?
- It pays for damages due to accidents/calamities.
It is not that only are cars expensive, penalty for their repairs is costly. Sometimes, your car may be damaged due to accidents/natural calamities. If in case a car accident occurs, you may be held responsible for costs associated with it. It may include legal fees, the injured person’s medical expenses or their lost income compensation or their legal claimed actions. However, if you have car insurance, you need not pay for these repairs by yourself.
- It reduces your liability.
Liability coverage for a car always helps to pay for damage. Without liability coverage, you would likely have to pay liability costs out of your own earned money. Taking Third Party Liability (TPL) car insurance coverage is a must in India. The TPL policy covers against the legal actions of an accident caused by you. For example, if you happen to cause an accident that result in damages to another person’s property or injuries to another driver/pedestrian, the insurance will pay for it.
- It pays for your recovery claims.
Not every car owner who suffers an accident is lucky to get away with a few cuts and minor damage. Some accidents result in fractures and other serious injuries which require hospitalization. Instead of paying the high hospital billing cost and treatment costs from your own pocket, you can get your car insurance policy to pay these recovery expenses. It also may help cover your passengers’ expenses due to the car accident. This Coverage may help pay for hospital visits, doctor bills and surgery.
- It compensates your family after your death.
The most unfortunate outcome of a road accident is the car owner’s death. Once the insurance policy holder has passed away, it might become difficult for his or her family to sustain its daily life. However, a car insurance policy can help pay the family’s expenses after the undesirable event.
What are the types of Car Insurance Plans?
1. Third Party Insurance:
This insurance is mandatory by law in India and it covers the third party claims under ‘no fault liability’. It protects a policy holder against losses which emerge due to injury/death to a third party or any damage to the property. In case you come across an accident, a third-party car insurance policy will reimburse the car that you are using. The other party will receive compensation for the damage and you can be protected from a financial crisis. Here third party includes a person who claims damages at the time of accident. But this insurance does not protect you, your vehicle and co-passengers against losses which arise due to bodily injury/death as it covers the insurance of the other party.
2. Comprehensive Vehicle Insurance:
In addition to third party coverage, this policy covers you, your car and co-passengers against damages /losses arising from unforeseen calamities, hence it is better to purchase this policy. This vehicle Insurance policy provides protection for your own vehicle when met with accidents or any other calamities. It also only provides the coverage of third-party insurance. Therefore, among all the different types of car insurance provided, comprehensive Car insurance proves to be giving the maximum coverage and hence it’s better to chose it.
Top 5 Best Car Insurance Plans & Companies 2018 in India
S.No: Insurance Company Name Ranking Source 1
ICICI Lombard GIC Ltd
HDFC ERGO General Insurance Company Ltd
United India Insurance Company Ltd
The Oriental Insurance Company Ltd
Tata AIG General Insurance Company Limited
Bharti AXA Car Insurance
Bajaj Allianz Car Insurance