Why is it important to have auto insurance?
Damages to your car or bike can be expensive to repair. If the damage is severe, repairing it can be almost as expensive as the purchase price. But, if left unrepaired, it will cause a fall in the value of your automobile. Hence, you need auto insurance to protect your interests and finances.
Take a look at some benefits offered by an auto insurance policy:
- Preserves the value of your vehicle
- Since an automobile insurance policy helps recover damage expenses, it keeps the monetary value of your car intact.
- So, cars with an active insurance scheme are likely to have more financial value.
- As a result, a car or bike with an insurance policy will fetch a higher resale value than a car without an insurance.
- Pays for repair expenses
- If you’re driving on the road, there is no way to be completely protected from an accident.
- While you can’t rule out damages to your vehicle, you can reduce expenses borne because of car or bike repairs. They are usually expensive and will vary from model to model. But, without an insurance scheme, it will certainly eat into a significant chunk of your income.
- An insurance policy will help you fund these repairs partially or completely, depending on the terms of your plan. This reduces the financial burden of car repairs on your pocket.
- Coverage against damage due to natural calamities
- When you pick a comprehensive own damage auto insurance, apart from accidents, it will also protect your car or bike against damaging arising due to natural calamities.
- Usually, auto insurance policies protect you against fire, floods, lightening, landslide, cyclone, hailstorm as well as fire and shock damage due to an earthquake.
- Coverage against damage caused by man-made calamities
- Most commonly, an auto insurance policy will cover you against man-made calamities such as theft. But, it also covers a host of other situations.
- These situations include burglary, act of terrorism, strike or riot and damage while traveling by road, waterways or air.
- Regardless of man-made calamities or natural ones, it is important to remember that the amount of this cover depends on the price and value of your car. Expensive cars receive higher amounts of coverage, as repair costs are higher.
- Protects you legally
- In India, a car without insurance is legally prohibited from being driven on the streets. Even if you don’t have a comprehensive insurance policy, you are required to have a third-party insurance policy.
- This policy covers the damages borne by the third-party in case you cause an accident. Your policy will remedy the damage caused to the other party’s vehicle and any injuries that they have suffered.
- Driving a vehicle without insurance attracts legal repercussions. Your license and vehicle registration will be suspended, and you will be liable to pay a fine of Rs. 1,000. Instead of this, or in addition to these punishments, you may also be imprisoned for up to three months.
- Provides added benefits
- You can also opt for add-ons that enhance your policy’s coverage. Common add-ons include roadside assistance, zero depreciation cover, personal accident cover and engine protect cover.
- Purchase these extra covers help you boost the benefits that you draw from your auto insurance policy.
It is evident why investing in a good insurance policy is an absolute must—regardless of whether it is a legal rule. For a premium, you can protect your investment manifold and contain the risk you and your vehicle may face when on the road.