Why Car Insurance is Mandatory in India?

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Why is Car Insurance Mandatory in India?
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What is Car Insurance?

• A car insurance is a contract between you and
  your insurance company that helps in protecting
  your vehicle from unforeseen risks. This policy
  covers the policyholder against financial losses
  occurring due to theft, third party, accident and
  damages.
• To ensure protection against any financial
  liabilities arising due to any damages caused by
  you to a third party or your vehicle, having a
  car insurance becomes imperative.

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Types of Car Insurance in India

• Third party liability cover

• Comprehensive Car Insurance

• This cover is mandatory as per Indian Law. It
  secures you against any third party damages
  caused due to your vehicle.
• It covers Third party bodily injury or death and
  Third party property damage

• This type of car insurance is not mandatory as
  per the law.
• This type of car insurance policy insures you and
  your vehicle in case of any damages due to
  man-made and natural calamities.
• Along with this, a car insurance policy also
  covers third party liability and also provides a
  personal accidental cover for the owner

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Reasons Why Car Insurance is Mandatory in India

• Car Insurance pays for your damages
• You dont have to pay the repair costs from your
  own pocket.
• Having a third party covers third party and
  property liability.
• While, having a comprehensive cover provides
  coverage for your car and third party expenses.

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• 2. Reduces your liability
• Having a third party cover is mandatory in India
  as it covers you against all the repair costs and
  legal costs of an accident caused by you to a
  third party or property.

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• 3. Vehicle Insurance is mandated by the Motor
  Vehicles Act
• As the chances of an accident are high while
  driving/riding on Indian roads, the Motor
  Vehicles Act 1988 makes Car Insurance mandatory.
• The act mandates third party liability to make
  sure that the damages caused to third party or
  third party property are covered.
• Also, its always advisable to opt for a
  comprehensive cover as it covers damages caused
  to your car and also third party liability.

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• 4. Saves you from hospitalisation expenses
• Having a car insurance policy is beneficial as it
  covers costs for the treatment of any injury
  caused due to an accident while riding the
  car/bike.

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• 5. Helps you stay stress free
• You can ride stress free without worrying about
  the financial costs involved in covering damages
  caused by you or to your car.

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• 6. Costs less when purchased online
• Due to less operating costs, car insurance
  policies are available online at a much cheaper
  rate. Insurance brokers offer you good discount
  on purchase of car insurance policy online.

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What Happens If You Drive Without an Insurance
Policy?

• In India, driving without a valid car insurance
  policy will attract the following penalties
• Your driving license shall be suspended.
• You cars registration too is suspended.
• You have to pay fine of Rs. 1000 and can be
  imprisoned for 3 months.
• Recommended Read What Makes Car Insurance
  Lawfully Mandatory in India?

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Thank You!