Why You Need Auto Insurance

Why You Need Auto Insurance - Auto insurance is mandatory by law. It is illegal to drive a car without insurance in India. Also, if you have a valid auto insurance policy, then in the event of an accident, you don’t have to pay from your own pocket. The auto insurance company will bear the expenses. The eventualities that are generally covered by such policies include accident, fire, theft, flood, natural calamity or earthquake. Auto insurance policies need to be renewed every year.










There are two types of auto insurance policies in India.

1. Third party insurance: This is also known as Policy A. In case someone else is injured or another car is damaged in an accident while you are driving, then that third party will get insurance. For instance, if someone is injured and needs hospitalization, then third party policies will bear the medical expenses of that person. Your car is not covered under the third party policy.

2. Comprehensive insurance: As the name suggests, comprehensive insurance covers both you and the third party in case of an accident. It is also known as Policy B. Comprehensive insurance covers damage to your vehicle, the third party vehicle, medical expenses for you, and the passengers in your car and for the other party. Apart from accident, this type of policy also covers any damage to your vehicle due to theft, burglary, natural calamity or terrorist attacks. The auto insurance premium in comprehensive insurance is based on the insurable value of your car. As the cover is wide in comprehensive insurance the premium is also high.

Types of Auto Insurance Coverage

First of all, it is important to find out the amount of coverage you require, depending upon various factors such as the model of your vehicle, class of the car, fuel type, year of manufacture, place of registration , number of kilometers used, modifications done and current showroom price.

The coverage level is the major factor in deciding the premium you need to pay. You should also consider the scope of coverage for getting an all-inclusive, wide coverage for your vehicle. There are different types of coverage you can get. Personal injury auto insurance protection covers you and any passenger in your vehicle in case of an accident. Uninsured coverage covers the costs incurred in case you are hit by an uninsured vehicle. Collision coverage covers repairs to your car in case of an accident by other car or an object. Car accessory coverage has additional cover in case of theft or damage to car accessories like music system or air conditioner.

So, check your needs and those of your vehicle before you buy auto insurance.