Mandatory Car Insurance in India

We live in India where general issues like the unruly rise of the population, the number of cars and hence the increase in traffic strike really hard. Due to the unmatched rise in the number of cars and other dynamics, the probability of mishaps has also risen.

These accidental mishaps can sometimes be devastating for you, your family and other third parties. It can leave you and the others involved in the accident financially strained and distressed. Hence, the government of India made it mandatory for vehicle owners to buy at least third-party car insurance.

Yes, according to The Motor Vehicles Act, 1988, it is mandatory for all vehicles in India to have a car insurance policy to drive legally on the roads. However, note that comprehensive car insurance is not compulsory, but having at least third-party insurance is mandatory by law in India. 

People often ignore car insurance until they face consequences for not having it. However, these rules are made to keep everyone safe.

For example, if third-party car insurance wasn't mandated by law, most people wouldn't have it, and in case of an accident, both parties would end up arguing and facing huge expenses.

So, here’s why car insurance is mandatory by law:

Covers Third-party Liabilities

If your car gets in an accident with another vehicle or person, you will have to pay for the expenses or their medical bills, which can be quite high. Having third-party insurance covers these bills, so you don't have to burn a hole in your pocket.

Compensation to Family

If suppose an unfortunate accident causes your death, then your car insurance policy will financially take care of your loved ones by covering their expenses based on your policy terms.

Promotes Safe Driving

Car insurance encourages responsible driving as insurance companies consider your driving habits, age, and car make/model to determine your car insurance premium. They also offer a discount on premium as No Claim Bonus (NCB) which increases every year you don't make a claim, further promoting safe driving practices.

Provides Peace of Mind

Hospital visits as well as car repairs can be expensive. A car insurance policy with appropriate car insurance add-ons covers these costs, so you can have peace of mind and drive stress-free.

Car insurance is to protect us from unforeseen events and unplanned liabilities. Anyone can get stuck on the road with their car after an accident, car engine failure due to rain or theft of the vehicle. In any of the cases, having a car insurance policy will be a saviour.

Many times, we see new drivers who speed up their cars and cause damage beyond one’s imagination resulting in deaths. Such irreversible bruises make us think of the need for and

Benefits of Having Car Insurance

It is worthy to have car insurance in India considering the number of accidents in the past few years. Considering the scenario, here’s why you should have car insurance in India, or at least have a compulsory third party policy:

• Protects you from paying huge amounts in case of damage and losses caused to your car during an accident.

• Ensures you comply with the motor laws of India and saves you from hefty fines.

• Your car insurance policy will also cover for the damage and losses incurred to the third-party due to your car. 

• If you opt for comprehensive car insurance, you can get enhanced overall coverage for your car using appropriate add-ons.

To Cover the Own Damage

There will be no coverage for the car’s own damage if the owner does not have a comprehensive car insurance policy. In case, the car owner bangs in the vehicle due to his fault or accidentally, he will suffer some losses. The car owner will receive the payment for the damages subject to the car insurance cover. Otherwise, in all the cases he will not get any reimbursements. Other than accidental losses, damages of a car may arise due to natural calamities as well. India has witnessed and is prone to many storms, floods, and massive earthquakes, which in turn could result in multiple losses.

Other than accidental losses, damage to a car may arise due to natural calamities as well. India has witnessed and is prone to many storms, floods, and massive earthquakes, which in turn could result in multiple losses.

To Ease off the Huge Third-Party Liability

Considering the rise of traffic in nothing flat, there are increased chances of smash and bend. You may overcome your own losses, but what if the third party cannot bear huge expenses after a loss. Damage caused by your car to the third party is your liability to be paid. 

It does not matter whether you are able to afford it or not. The third party may suffer bodily injury or property damage for which you may be held liable. Car Insurance, in this case, will be helpful and that will save you from undue liability.

To extend Compensation to the Family of the Deceased

Car insurance is mandatory to help the family of the deceased who might lose their life in a car accident. The compensation under the Motor Tribunals Act was introduced to ease the burden on the families.

While buying a new car insurance policy online from Digit, you don’t need a load of documents or paperwork. By having the following documents handy, you can easily buy a new car insurance policy withing minutes:

• Car Registration Certificate 

• Previous year car insurance policy, if applicable

• Any of these documents for KYC verification - PAN/Aadhar/DL/Voter id/Form 16/Passport 

Presume that you abide by the traffic rules but suddenly hit a car parked on the side of the road. It will be a third-party property damage caused by your vehicle. This would be the first time that you’d get into an accident that could leave you debted for the damages. You will be liable to pay for the losses. But if you fail to have car insurance, you might face:

• Suspension of your driving license
• Legal Proceedings and punishment
• Lack of financial protection in case of accident and damage
• Suspension of the car registration
• Heavy traffic fine for driving without insurance

Presume that you abide by the traffic rules but suddenly hit a car parked on the side of the road. It will be third-party property damage caused by your vehicle. This would be the first time that you’d get into an accident that could leave you indebted for the damage. You will be liable to pay for the losses. But if you fail to have car insurance, you might face:

• Suspension of your driving license

• Legal Proceedings and punishment

• Lack of financial protection in case of accident and damage

• Suspension of the car registration

• Heavy traffic fine for driving without insurance

Thus, imagine if you blow up your car (not insured) and find out that the expenses to rectify it are too high. Incapacity to bear the expenses for liability or repair due to insufficient savings encircles you with worry and stress.

One car accident can ruin not only yours but also many other lives. So, buying at least a compulsory third party car insurance policy is wise and not an obligation. Still, many remain doubtful about buying it without considering its scope of operation.