Why Is Car Insurance Mandatory In India
Is It Compulsory To Have Car Insurance In India?
India is a country where many factors make driving on the roads especially dangerous. It is a country with a large and ever growing population. Also, there is increasing social and economic mobility. All these factors contribute to an extremely high number of cards on the roads.
Further, the road infrastructure in India is not up to the mark in many places and can be hazardous or dangerous. Many cities also face heightened risks of natural calamities such as floods. All these factors contribute to the crux of the matter that the risk of getting in an accident or causing damage to another’s vehicle is extremely high in India. Let’s read more about how this leads to car insurance being mandatory in India.
Due to the social and economic demographic of India as well, not many people would be able to afford to repair damage that comes to their car due to accidents or natural calamities, as buying a car is often a novelty and a big purchase, with little money left over for repairs. As such, car insurance has been made mandatory in India at least up to the Third Party Liability level.
The compulsory investment into car insurance makes sure that no individual would be caught with an extremely high bill of repairs if they get into an accident, as the other party’s insurer would compensate for the repair of the damages caused to them as the third party. It is thus like a protective net and enables people to drive on the roads with additional peace of mind, ensuring that in case of an accident, the monetary damages caused would be compensated for. Therefore, to ensure that somebody is held liable for the damage and that accidents are compensated for, car insurance is mandatory in India.
What Type Of Insurance Is Mandatory?
The mandatory level of car insurance is at least up to Third Party / Liability Only Insurance which would compensate for any damages caused in an accident to a third party. It does not cover own damage caused to the policyholder’s vehicle or cover damages from accidents in which a third party is not involved.
As such, it is advisable to purchase at least comprehensive car insurance which would cover not only damages to a third party but also damages caused by a natural calamity or an accident that does not involve any third party, for example, a tree branch falling onto the car. An insurance policy that covers own damage in this way is not mandatory by law but is extremely advisable.
Types of Car Insurance You Should Know:
Comprehensive Car Insurance Policy
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Takeaway
Due to the high risk of accidents in India, car insurance at least up to third party liability is mandatory. This is due to the fact that it must be ensured somebody is held liable for the damages caused to someone during an accident and can take responsibility for the same. While it is mandatory to purchase only up to third party liability insurance, it is advisable to purchase comprehensive insurance coverage.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
