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Why Car Insurance is Important – Things to Keep in Mind

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When you buy a car it is not only your life that you should care about but it is also your car’s life and car safety features which you should keep in mind always.

If you are confused about whether you need Insurance? This article will tell you why Car Insurance is necessary. Apart from it being a mandatory aspect for a vehicle, it is better to have full insurance for avoiding financial trouble due to unforeseen damages.

As consistent with the laws, coverage is a shape of risk control broadly speaking used to hedge in opposition to the chance of contingent, unsure loss. Insurance is described because of the equitable switch of the chance of a loss, from one entity to another, in trade for payment. An insurer is an enterprise promoting the coverage; an insured, or policyholder, is the man or woman or entity shopping for the coverage policy. The coverage fee is an issue used to decide the quantity to be charged for a positive quantity of coverage, referred to as the premium. 

Car safety features you should keep in mind while we talk about the importance of insurance.

We sum the important reasons in the key points given below as to why you need to have a Car insurance

Why do you need Car Insurance?

Well, if you are looking for the most basic reason to insure your car

Then it has to be that car insurance is mandatory by the Indian government law. The Car Dealer Services from which you might purchase your car might also advise you about basic reasons to get insurance. In fact, driving a car which is not insured can draw heavy penalties.

But there are many other reasons for which you must ensure your car insurance.

Here are the top four reasons which will improvise you to take up your car insurance right away;

Coverage for third-party liability Car:

Liability if you accidentally injure a person or damage their property with your car then your car insurance policy could cover those expenses for the affected person by following a legal process and he/she can claim damages from your insurance company it is for this reason a third party cover is mandatory for all cars under the law.

Damages to your Car:

A car is unlikely to escape an accident without getting damaged, it is saddening but in situations like this when you are in a certain condition that you cannot pay for the damages caused to your car,

your insurance could rescue you to a great extent by helping you with repairs and any necessary modification of your vehicle, and hopefully, if you are in India you can’t walk a mile without accidents, so there is car insurance by your side at times like such

Injuries to Passengers and Drivers:

Insurance provides a measure of financial protection in the event of a car accident. That’s right; when you take up car insurance it’s not only that is car is being protected from the harm of injuries or damages but with the right car insurance you get covered for the financial risk of injuries sustained to the driver and passenger as well. but, If you cause a car accident you could be liable for thousands of dollars in car repairs, legal fees and medical bills. The insurance coverage only gives you an amount depending on how much coverage you have purchased.

Theft flood fire terrorist attacks:

With comprehensive car insurance, your car gets covered for damages caused due to man-made or natural disasters like theft, flood, fire, earthquake or terrorist attacks and you can either get it fixed under your insurance policy or get its compensation if it was damaged beyond any repairs.

Note: Coverage against fire In case a vehicle is destroyed due to a sudden fire, the insurance company will automatically indemnify the insured for any losses suffered. However, it’s necessary to prove that the fire was accidental and not a deliberate act. In every action of vehicular damage caused due to fire, it must be proven beforehand, that fire was due to natural causes 

Auto Insurance: 

In India, offers with coverage covers for the loss or harm precipitated to the car or its components because of herbal and man-made calamities. It gives a twist of fate cowl for man or woman proprietors of the car even as riding and additionally for passengers and 1/3 celebration felony liability. There are sure preferred coverage corporations who additionally provide online coverage providers for the car. Auto Insurance in India is an obligatory requirement for all new cars used whether or not for business or non-public use.

The coverage corporations have tie-ups with main car manufacturers. They provide their clients with immediate vehicle mobile quotes. The auto top rate is decided through more than a few things and the quantity of top rate will increase with the upward thrust within side the charge of the car. The claims of Auto Insurance in India may be accidental, robbery claims or 1/3 celebration claims. Certain files are required for claiming Auto Insurance in India, like duly signed declaration form, RC replica of the car, Driving license replica, FIR replica, Original estimate and coverage replica. You may reach out to any Automotive Services to ask your query about the Insurance policies.


No claim bonus is given to the client if no claims are made; this bonus will go up to five hundredths in some cases provided the policy is revived within ninety days of the end of the previous policy. This no claim bonus is transferable because it is often used even though one is ever-changing the machine non-depository financial institution. additionally to the premium that one pays to induce the vehicle insured an additional charge may be levied on a four-wheeler owner under special circumstances. These are as follows:-

•Extra premium is paid on electrical and equipment that does not come back as a part of the manufacturing plant fitting however are bought individually or foreign from abroad.
•Vehicles fitted with LPG or CNG kit ought to be insured by payment of additional premium. If the geographic area has to be extended to alternative South-East Countries like Bangladesh, Nepal, Bhutan, Pakistan, country and Maldives.
•Vehicles fitted with a fibre-glass fuel tank.

General principles of insurance:

Insurance plays a really crucial role in each individual’s life. It covers all those numerous styles of written agreement transactions that each assured person enters into with an insurance firm. This embrace each business and non-commercial and private insurance transaction. it’s attainable that in all transactions accompanying the central interest there may be some kind of losses caused to the most subject- matter insured. This is despite the insured having taken all the assorted necessary.

 (minimal) levels of precautions, together with an inexpensive degree of care to safeguard the stake ad manum. There’s so, an Associate in Nursing inherently has to be compelled to indemnify the principal assured against any loss(es) that he has suffered throughout the course of a such implicit transaction(s). This method of indemnification is sometimes awarded by the insurance firm once a radical investigation of all relevant factors leading up to the principal explanation for the incidence of loss. However, whether or not the insurance firm is truly susceptible to indemnify the assured for the loss suffered is a lot of a question of fact. 


Additionally, there are also cases where the insured’s policy contains a “cashless clause.” This can be a clause wherever the insured isn’t very needed to pay out of his pocket directly. Instead, the insurance firm pays for the damages he or she has suffered as an instantaneous result of the injury sustained at the time of the accident. 

Generally, if a selected vehicle (e.g. car, bus or passenger van etc.) is meant for a selected purpose, then it should carry solely that limit of passengers in its seats. If the owner wittingly defies the statutory limits and also the vehicle exceeds the whole range of passengers leading to an Associate in Nursing accident, then the owner is mechanically precluded from claiming damages from an insurance firm.


There are unit 2 kinds of coverage; viz. personal coverage and package coverage. whereas the previous covers all incidents associated with death/injury caused to a 3rd party supply & damages caused to the vehicle, the latter covers the owner(of the vehicle that caused the damage) from any losses caused to the vehicle by fireplace, theft, robbery, vis major acts, floods etc. In United Bharat Insurance Co. vs. Lehru & Ors 10 Associate in Nursing accident occurred while the automobile was in motion. the motive force of the vehicle filed a claim within the insurance firm for an award of the assured quantity.

However, on any investigation by the insurance firm, it had been distinguished that the suspect was operating the vehicle on a faux license. This, the corporate, contended, was illegal in law that precluded it from subsidization damages. On initial charm, the Motor Vehicles court controlled that though the license was faux, the insurance firm was nonetheless susceptible to indemnify the suspect for losses suffered. On the second the Apex Court, it had been controlled that, regardless of whether or not the motive force had a faux license or not, the insurance firm would still be liable until such time they were ready to prove on the far side an inexpensive doubt that such license was so fake.

Comprehensive insurance coverage As per this principle, the insurance package policy covers a full host of events that might occur to the automobile and cause injuries to each of it and its occupants likewise, despite the owner taking all styles of a cheap degree of care. These may embody (but aren’t only restricted to): felony, destruction by a fireplace, any vis major determining factor etc. Comprehensive insurance coverage also can be alternative persons’ vehicles likewise, provided there was such a clause within the insurance contract.

Coverage against felony sometimes, each transport insurance contains a clause that seeks to indemnify the insured against any kind of losses suffered if his or her vehicle is subjected to a felony. However, the sole demand for this policy to be operative is that there should be an Associate in Nursing assumption of no-return policy by the taker of such policy. In alternative words, it should be firmly established on the far side an inexpensive doubt qua underwriter that there was no accidental loss by spatial relation of the insured’s vehicle.

Also, the excellent amount should be containing such clauses seeking to compensate the insured against such Associate in the Nursing act. However, car safety features you should keep in mind are important too.

Commercial Car:

Sometimes these vehicles (e.g. trucks, buses, etc.) come equipped with 2 kinds of forms. 

(1) Motor carriers’ business vehicle insurance and

(2) Truckers’ car insurance

Although each falls within the class of public business vehicles, however, there’s a marginal distinction between them. whereas the primary is a lot of a public liability indemnification that seeks to compensate members of the general public against any injuries caused to them by(or arising out of) significant motorcars, the latter covers solely individual accidents arising out of collisions involving significant trucks on each public road or street.

Coverage policy extent for public vehicles There are unit 3 broad classes beneath that all public vehicles may be covered. These are
Act Policy Third-party policy-

Comprehensive policy Act policy: It covers all styles of risks that the vehicle is to be insured. These may embody major acts or maybe damages accruing out of a sharp collision with alternative vehicles or motorcycles additionally.

Third party-policy: It covers all styles of risks that the insurance is made by law.

Comprehensive policy: It covers all styles of incidents that may occur while the insured car is in transit, by the ”Law of Insurance”.

Also Read: Why Airbag matters in Cars – Safety Guide

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