The Motor Vehicle Act in India mandates the purchase of car insurance when you buy a car or vehicle. Unless you have motor insurance, you are liable to be jailed up to three years or you will have to fork out a fine of INR 2000 or both. Moreover, with a vehicle insurance, you will no longer have to worry about the repair and maintenance of your prized car/vehicle. Before you purchase a motor insurance, you should learn about the types of insurance and what they entail-
Personal car insurance
The first thing you should do after purchasing a car is to buy a car insurance policy. Your car is extremely valuable and dear to you. A car is susceptible to harm from myriad different sources. A car insurance policy will safeguard it from both natural and manmade disasters. Your car could be damaged at the time of floods, earthquakes, it could be struck by lightning, or your car could be subjected to vandalism. Alternatively, it could be stolen or damaged during a riot. Then there is the matter of third party liability. If your car damages someone’s property or claims a life, then your insurer will pay compensation to the aggrieved third party and take care of your legal expenses. Other benefits can be included as add-ons like Lock and Key replacement cover, 24*7 spot assistance, zero depreciation cover etc. Therefore, your personal car insurance covers every possible provision to help combat an emergency.
Commercial vehicle insurance
A business owner should get her/his vehicles insured under this scheme. It applies to trucks, tractors, three wheeler autos, buses etc. Car Insurance is necessary because vehicles may break down or get damaged when they are put into service. They might bodily injure a third party or cause property damage. That is when your commercial vehicle insurance will kick in. the premium is determined based on the make and model of the commercial vehicle, its year of manufacture.
It is just the same as private car insurance, only it applies to two-wheelers. It provides coverage against natural calamities like fire, landslide, earthquake or man-made disasters like theft, vandalism etc. in case of third party injury or death, the issue is addressed by your insurer.
The type of car insurance policy you purchase depends on the type of vehicle you possess. Purchasing a vehicle and motor insurance should go hand in hand because not purchasing motor insurance is a punishable offence. Besides, motor insurance covers your car against a host of hazards.