Insurance, recently, has taken attention because of the increasing interest of individuals towards all kinds of loans. With the clients becoming more loan-friendly, the obvious reality has been the requirement to stack up on various insurance as well.
But, taking insurance has not been made obligatory by most banks. Although, there is an occasional bank that might insist (read request) you to take an insurance policy, if you are taking a home loan. But in legal aspect, they cannot force you to take an insurance at all for your house.
However, the only way where it is mandatory to have an insurance is when you buy a car or automobile. Automatically, when you buy a car you will also have an automobile insurance side by side with your purchase.
In fact, according to the Motor Vehicles Act of 1988, it is mandatory for any owner of a vehicle driving on public roads to have an insurance policy in order to cover the amount, in which the owner will eventually become legally liable to remunerate or pay as damages to third parties as a consequence of accidental death, bodily injury or destruction to property. Also, it is important for you to always bring along the certificate of insurance in your car as proof.
There are two types of motor insurance policies: Type I, which is regarded as Third Party Insurance (Form A), is the one which is obligatory or compulsory. This covers the policyholder against problems to a third-party’s valuables and property or the third parties themselves.
In simple words, if you were to hit another car and cause damage to that car and cause injury the occupant(s) of that car, a third party or an insurance company will pay for the repair of the other vehicle, and will pay even for any medical claims or injuries faced by the occupant(s) of the other car and even any passengers in your car other than you.
But this policy or insurance does not cover the costs of repairing your own vehicle itself. However, you could include some riders to this policy that will cover for your legal obligation to pay compensation for:
- Death or bodily injury to a third-party person
- Damage to third-party property
Liability is also covered for an unlimited amount in view of death or injury and damage to third-party property for Rs 7.5 lakh under commercial vehicle and cars and Rs 1 lakh for those types such as scooters and motor cycles.
Moreover, there are additional possible ways for third-party fire and theft as well. That is, if for example, your vehicle is stolen or is set on fire, these riders will also cover them as well.
Type-II policy, which is better known as the comprehensive car insurance covers (Form B) payment for third-party damages and injuries. Meaning to say, the insurance company will pay out in the event of your vehicle being lost or set on fire, and will also pay for any destruction, problem or damage to your own vehicle (regardless of whose fault the accident was).
In addition to the included cases under liability only, this policy covers the following: loss or damage to the insured vehicle and its accessories due to fire, explosion, self-ignition or lightning, burglary, riot and strike, malicious act, terrorist act, earthquake, (fire and shock) damage, flood, typhoon, hurricane, storm, tempest, inundation, cyclone and hailstorm, transit by road, inland waterway, lift, elevator or air. Indeed this policy is simply great and amazing! So, this brings us to what kind of car insurance cover is best for you? Well it’s up for you to choose, but if you have enough budget, you better choose both.
Getting a car insurance is very important not only to prevent you from future headaches but more so with regards to safety and protection of your life, loved ones and those people whom you will meet along the way while driving. Don’t worry, getting an insurance and maintaining it is never a hassle anymore due to online transactions. Now, you can do online processing and transacting of claims and premium payments. This implies that your life is going to become much easier and truly worth living.