Car insurance is essential for many drivers, and here’s why:
Covering the costs of an automotive accident can be extremely expensive. Savings and basic auto liability coverage might not be enough to cover all expenses, including lost wages. That’s why having car insurance is crucial.
If you cause an accident, paying compensation to the victim is required. It’s impractical to have such a large sum readily available, but with car insurance, you can access the necessary funds. Compensation for car accidents can exceed significant amounts, and insurance helps cover these costs.
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Types of Car Insurance in India:
In India, there are five main types of car insurance coverage:
1. Third-Party Liability Only Cover
This insurance provides compensation for damages to third-party vehicles.
It covers hospital expenses and treatment costs for third parties involved in an accident.
2. Comprehensive Car Insurance
Offers coverage for both your own vehicle’s damage and third-party liabilities.
Protects against risks such as fire, theft, collisions, and natural disasters.
Provides complete peace of mind with extensive protection.
3. Personal Accident Cover
Covers injuries or death of the policyholder resulting from an accident.
Includes compensation for accidental death and permanent disabilities.
4. Zero Depreciation Insurance
Ensures that the full claim amount is provided without factoring in the car’s depreciation.
Ideal for new cars, this cover helps save money on repairs and replacements post-accident.
5. Engine Protection Cover
Covers repair costs for engine-related issues caused by oil leaks or water damage.
Offers additional financial security for unexpected and costly engine problems.
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Benefits of Car Insurance
1. Handling Liability in Accidents
Car insurance is essential for managing the financial fallout from road accidents. Determining fault in an accident can be complex, as liability isn’t always clear-cut. When accidents occur, insurance companies often negotiate over fault and compensation.
In accidents involving cars, people, and bicycles, cars are usually deemed more responsible to protect vulnerable individuals. Car insurance helps cover repair costs and additional expenses if your vehicle is damaged. For instance, if another car collides with yours at an intersection, causing damage like a dent, your insurance can cover the repair costs. The extent of coverage varies depending on the type of insurance policy you choose, providing compensation even if you are partially at fault or unable to hold the other party responsible.
2. Coverage for Your Fault
You might wonder if you can claim damages from the at-fault party’s insurance. While the other party’s liability insurance could cover your damages, it might not always be sufficient. The compensation you receive is based on the other party’s liability, which can be reduced by the proportion of fault assigned to you.
Car insurance is beneficial in such cases as it can cover the gap left by insufficient third-party compensation. It also provides personal injury coverage, paying for costs associated with your own responsibility in the accident.
3. Protection Against Various Losses
Car insurance offers protection against a wide range of losses, including theft, hit-and-runs, natural disasters, and self-inflicted damage. For example, if you crash into a railing while navigating a bend, causing damage to your car, insurance will cover the repairs, even though no other party is involved.
Insurance also covers damages from theft, hit-and-runs, and natural disasters. For instance, if your car is damaged by flooding due to a storm, your insurance will cover these losses, as long as the damage falls within the policy’s terms.
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4. Insurance Coverage Limits
It’s important to note that car insurance has coverage limits. The maximum payout amount is set when the policy is purchased and cannot be exceeded. This means that in some cases, you might need to cover part of the repair costs yourself.
Insurance premiums are based on the vehicle’s market value, and higher coverage generally results in higher premiums. Ensure you understand the coverage options available and select a policy that meets your needs.