Why Do We Need A Car Insurance Policy?

As per the Motor Vehicles Act of 1988, it is mandatory to have a car insurance policy for every car owner in India. It is a must to have this policy as it provides protection against financial loss or damage in the event of a personal accident, third party liabilities, theft and calamities like fire, floods, etc. Without car insurance, the car owner may face a lot of issues legally and financially. Thus, it is crucial to buy a suitable policy to meet these requirements.

Comprehensive Insurance:

Comprehensive car insurance is an extensive insurance policy for private cars that offers protection to the vehicle from all kinds of risks, such as accidents and collisions, theft, third party liabilities and natural calamities like flood, landslide etc. The insured also has the option of adding add-on covers to enhance the scope of coverage.

3rd Party Insurance:

Third-party car insurance is a standard vehicle insurance policy which is mandatory to be taken in India. It covers you up to a maximum of INR 7.5 lakh against third-party liabilities and offers insurance coverage against damages caused by your car to a third party or third property. It also provides coverage in case of the death of a third party.

Standalone Own Damage Car Insurance Policy:

This kind of policy provides coverage for own damages, which has caused loss to the policyholder’s car. It is to be noted that this kind of policy does not offer coverage for third-party car insurance. Standalone own-damage car insurance policy is effective in India from September 2018.

What Are The Documents Needed For A Car Insurance Policy?

  • Duly filled and signed insurance proposal form.
  •  Identity proof such as PAN card, Aadhar card or passport.
  •  Address proof such as electricity bill/ration card or Aadhar card.
  •  A recent passport sized photograph.
  •  A copy of driving license.
  •  A copy of registration certificate or RC of the vehicle.
  •  Pollution certificate.

What Are The Benefits of Cashless Garages?

Cashless garages provide a quick and easy way to repair your car’s damages and also settle claims in a hassle-free way. Generally, insurance companies have a great tie-up with these garages which are specialized to mend all the car repairs. The insured is not required to pay anything to these networked garages as the claim gets settled with the insurance company. However, it is to be noted that policyholders of comprehensive plans can only make use of cashless garages.

Car Insurance May Be Mandatory:

Each state’s laws set minimum auto liability coverage limits that drivers are required to buy. A limit is the maximum amount your insurance company will pay toward a covered claim. You may want to increase your coverage limits beyond your state’s minimum requirements. Otherwise, you could end up paying out of pocket if, for instance, you cause a wreck that injures another driver and their medical bills exceed your coverage limits. Some states require you to have additional coverages on your car insurance policy, such as uninsured motorist coverage or personal injury protection.

Car Insurance Offers Financial Protection:

If you cause a car accident, you may be held responsible for costs associated with it. These may include legal fees, the injured person’s medical expenses or their lost income if their injuries leave them unable to work. Liability coverage may help pay for these costs. Without liability coverage (or adequate liability limits), you would likely have to pay these costs out of your own pocket.

Your Lender or Leasing Agent May Require Auto Insurance:

If you’re financing or leasing your vehicle, your lender may require you to purchase collision coverage and comprehensive coverage. Since the lender or leasing agent is the lienholder of your vehicle while you’re making payments, these two coverages may help protect their investment. Comprehensive or collision coverage may help pay to repair or replace the vehicle if it’s damaged in a covered loss. If you have gap insurance on your auto policy, this coverage helps pay off your car loan if the vehicle is totaled or stolen and you owe more than its depreciated value. Gap insurance is optional, and it typically works with collision and comprehensive coverage.

Auto Insurance Helps Protect Your Passengers:

Medical payments coverage and personal injury protection may help pay for your medical bills if you’re injured in an accident. It also may help cover your passengers’ expenses due to the accident. This coverage may help pay for hospital visits, doctor bills and surgery.

Auto Insurance Helps You Protect Yourself:

Even though liability coverage is a legal requirement, many people drive without it. Uninsured motorist coverage may help pay for your medical bills if you’re hit by a driver without insurance. This coverage is required in some states and optional in others. Having the proper car insurance coverage in place can go beyond fulfilling a legal requirement. A car insurance policy may help protect your vehicle, your wallet and even offer peace of mind.

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