If you had just purchased a new car or obtained your driving license, you would have heard that you require car insurance along with other documents whenever you take your car out for a spin.
You might be curious as to why you need to pay so much money for insurance when there might never be a situation where you may use it. If you feel that way, then this article is perfect for you.
In 1988, the Government of India amended the Motor Vehicles Act to make it mandatory for all vehicles to be covered under an insurance policy before they are allowed to go on the roads. Once you buy insurance for your car, the insurance companies are mandated by law to provide you with a certificate that you must carry with you whenever you drive your car. Of course, you can also present a digital copy of your insurance rather than a physical copy if you are requested to show your documents.
While you may think that there are no benefits for you if you take the insurance as you are likely never going to get in an accident then you are mistaken.
In India, the number of traffic accidents in 2021 was nearly 4.23 lakhs while the rate of death due to road accidents was 0.53 per thousand vehicles in 2021. Odds are that you will have an accident once in your life and when it does the burden will be huge. It is due to that the government made it mandatory to purchase car insurance. However, never fear as you have much to gain for your troubles.
- Guaranteed repair – If you ever damage your car or someone else’s vehicle, then the insurance company will pay for the repair. It doesn’t matter if the accident was caused due to your negligence or some other person, in the end, you will not have to pay from your pocket.
- Medical care – Imagine this. You are driving down the road when some pedestrians suddenly are crossing the road and you hit them. Even though you are not at fault, you will be asked to pay the medical bills since the cost of medical care is very high. In such a situation, if you have insurance then you don’t need to worry as the insurance companies are responsible to pay for the bills.
- Compensation for the deceased – Deaths due to traffic accidents are very high and they could happen to anyone at any time. Insurance will give relief to your family by compensating some money which could help your family.