People often wonder, why is car insurance mandatory in India? It is my money and I would like to spend it the way I want, why am I forced to buy insurance? Through this article, we will precisely answer this question. With increasing number of road accidents in the country, it has become a necessity to get a car insurance policy. Read-on to know why is car insurance mandatory in India.
Why is Car Insurance Compulsory?
It is estimated that on an average, in one hour, around 55 road accidents occur in our country. What if the cost is too high to be borne by one person? Who will take the responsibility for the damage?
This is where car insurance comes into the picture. Those who have a valid insurance policy can approach their insurer and voila! Problem solved! The insurer will pay for the damage. However, no one will cover the people who do not buy insurance. And if they cause an accident, they will have to bear the cost from their pocket.
Apart from paying for the damage and medical treatments for injuries, the drivers at fault could face serious legal liabilities. This is exactly why it is a law in India to buy Car Insurance. Under Chapter 11 (Section 145 to 164) of The Motor Vehicles Act, 1988, it is compulsory to buy at least a Third-party Car Insurance Policy in India.
Advantages of Buying Car Insurance
There are two types of Car insurance policies, Third party Car Insurance and Comprehensive Car Insurance. As mentioned earlier, a third-party policy is compulsory insurance in India for every car owner. However, it does not provide adequate coverage to the owners themselves.
Depending on the type of coverage, a car insurance policy will insure you for damages caused to the third-party and for own damage. Own damage includes cost of treating injuries of owner-driver and cost of repairing damages.
No Claim Bonus
During an active policy year if no claim has been raised, you will be entitled for a No Claim Bonus i.e. a discount on the amount of car insurance premium.
Peace of Mind
Car insurance offers complete peace of mind. One does not have to worry about a sudden financial crunch which may occur if the car is stolen or damaged.
How to Buy Car Insurance in India?
There are many ways in which you can get your car insured against unforeseen events. Two of the important ways are online and offline. Here is how to buy car insurance:
Buying car insurance online is the easiest way available today. Many general insurance companies in India, like us i.e. Acko General Insurance, offer car insurance online. Simply visit the car insurance page, select the desired type of policy, fill in your details and make the payment. Your car will be insured in no time. You can buy car insurance online in India from anywhere and any time.
Getting insurance offline is a manual process unlike buying car insurance online in India which is instant. You can buy the policy through your car dealer, insurance agent or by visiting the insurance company. You need to produce the required documents, make payment and buy the policy. As you need to physically be present while buying insurance offline, it is a slightly tedious process.
The Bottom Line
Buying insurance is similar to saving money to cover yourself financially in case of an accident. But the scope of these savings increases to a great extent when you have an insurance company to back you. The government has made it mandatory to buy car insurance because no person should suffer a financial loss from an accident. If they do, they should be compensated fairly.
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