Motor Insurance in India-Types and Benefits
Motor insurance is important as it prevents a person from paying huge expenses when his vehicle gets damaged due to unforeseen events. A motor insurance prevents the car owner from financial losses which may arise due to accidents and theft and other such natural calamities. It’s a contract for a vehicle where the insurance company will pay for the insured’s financial losses resulting from stated specified events.
In this article, you will get to know the motor insurance types available in India and the benefits one can receive.
Why it’s crucial to get motor Insurance?
In India, there are around 4 lakh people who encounter accidents every month. This number of fatalities & road accidents within India is rising at compounded yearly rate of 4%.
The reasons for such serious numbers are poor state of the roads in India and rash driving by many people. Hence, motor insurance is a crucial thing to buy even before buying a vehicle. Also by law, it’s mandatory to get motor insurance.
Further you can learn the 2 types of motor insurance available in India and then get one as per your requirements.
The 2 types of motor insurance in India are-
1. Third Party Insurance
2. Comprehensive Insurance
Third Party Insurance
• Third Party Insurance is compulsory by law. Third Party Insurance protects the insured against losses arising for bodily injury or death of third party. It also covers the costs resulting from damage to property.
• Third party refers to the people who travel with you and get injured during any mishap.
• Third Party Insurance does not provide protection to the insured & his/her vehicle against losses which may arise due to certain unprecedented events.
Comprehensive Insurance
• Comprehensive Insurance provides a comprehensive cover.
• It includes third party coverage and also offers protection to the insured and his/her vehicle as well as co-passengers against the damages arising from certain unforeseen events. Hence, it’s advisable to purchase a comprehensive motor insurance.
Who should purchase Motor Insurance?
Both individuals & corporate entities who own a vehicle must buy motor insurance. All the vehicles, whether they’re for commercial & personal use must be insured as mandated by Motor Vehicles Act, 1988.
The benefits of Motor Insurance are as follows-
It’s an essential financial safety cover which helps a person to offset significant damage costs
• It covers bodily injuries caused to the insured & third party
• It covers lost wages caused due to injury
• It gives coverage benefits to the survivors when any accident leads to demise of the members involved
• It protects the insured against third party lawsuits and claims. In the absence of insurance the insured may have to pay expensive third party costs especially if any mishap results in the demise of third party.
• It covers the repair costs of your vehicle caused due to any accident
• Protects one from losses which may arise due to natural calamities such as cyclones and earthquakes
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