While purchasing new cars or used models, buyers generally have to face the issue of vehicle insurance. The basis objective of auto insurance is to ensure that the financial risks involved during the functionality of the car are duly compensated. Unexpected occurrences, such as collision or breakage are part of the various clauses under vehicle insurance. Some people might also think as to why they need auto insurance as they are safe drivers and do not cause any kind of hindrance while driving. Interestingly, car insurance in India is mandatory and all the vehicles running on roads must comply with the basic rules and regulations issued by the vehicle authority.
The Motor Vehicle Act states that each car running on road must be insured by the concerned department and must carry a third party liability at least. This means that all the vehicles in India must carry a third party insurance plan so as to cover the damages provided to the third party in case of any severe incident. The vehicle owner might or might not be included in this type of insurance plan depending upon the type of scheme he/she has opted for. Auto insurance has been made mandatory not only because it is illegal for a car to be driven without one but not every individual is able to afford the expenses caused by damages.
Car insurance in India is generally of two types and is categorised as – Comprehensive plan and Third Party Liability scheme. The latter scheme only covers the damages occurring to the other party, which is involved in an accident and does not include the damage cover for the owner's vehicle. However, one can add certain clauses to this plan in order to ensure that legal liability for paying the compensation is at least covered. These additional clauses in vehicle insurance also benefit the users in case their new models or used cars are being stolen or damaged under fire.
The former scheme or the Comprehensive policy is dedicated to catering the expenses of the vehicle owner as well as the third party. The premium for this type of car insurance in India is generally hefty but is duly compensated over a longer period of time. The comprehensive policy covers the damages and injuries occurring to the third party and will also benefit the vehicle owner in case of his/her own injuries. The scheme also covers the expenses if the vehicle is damaged in case of a natural calamity, such as fire and earthquake, and if it has been stolen.
Auto experts believe that making car insurance mandatory helps the people in need to pay their expenses. Not every car owner might be able to pay for the damages caused to his own vehicle or others in case of an adversity. The car insurance ensures that the damages are being paid and a minimal amount is being shed from the pockets of the owner. Also, a person might be careful while driving but he/she cannot assure the same about the other person on road.
