The need for motor insuranceWhile motor insurance is mandatory in India for those owning a vehicle, having it is more than just abiding by the law. Irrespective of whether you own a two-wheeler, four-wheeler or a commercial vehicle, you need to buy insurance.
While the type may differ depending on the vehicle you own, the purpose of insurance is the same, which is to provide you with a financial coverage in case your vehicle suffers damages due to a mishap. A motor insurance also comes in handy when a third-party is subjected to losses involving your vehicle.
Situations where a motor insurance comes handyThere are several situations where a motor insurance helps. Some events where it comes to your rescue are:
- Damages suffered due to natural calamities In case your vehicle suffers damages due to natural calamities such as earthquake, floods, lightning, etc., your insurer compensates for the losses suffered. These can strike anytime and can cause extensive damage to your vehicle, repairing which can take a toll on your finances.
- Losses suffered due to man-made causes Theft, riots, terrorist attacks, wars, etc., are man-made situations which expose your vehicle to vulnerabilities. A motor insurance compensates you for the losses suffered in such a scenario.
- Coverage against third-party liability A motor insurance policy also provides you with financial coverage against liabilities arising due to damages suffered by a third-party involving your vehicle. Known as third-party cover, here the insurer compensates, on your behalf, the third-party for the damages incurred. Motor Vehicles Act, 1988 makes it mandatory for every vehicle owner to have this cover.
Types of motor insuranceDepending on the type of vehicle, motor insurance is broadly classified into three major types including:
- Car insurance: You need to buy this insurance, if you own a car.
- Two-wheeler insurance: This insurance is needed if you own a two-wheeler.
- Commercial vehicle insurance: If you own a commercial vehicle, for the purpose of income, you need to avail a commercial vehicle insurance.
Add-ons with motor insuranceTo enhance coverage, there are various add-ons available with motor insurance. The nature of these add-ons varies. Some of the most common add-ons are zero depreciation cover, engine protection cover, road-side assistance cover and lock and key cover. Note that opting for add-ons increase your insurance premium. However, these add-ons further fortify your insurance coverage.
While buying motor insurance, compare policies from different insurers to make an informed choice.
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*The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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