Why Car insurance ? Drastic upsurge in road accidents and fatalities has become a major challenge for India. As per NCRB data around 2 Lakh, people lose their lives in road accidents annually.
While India contributes 1% of the total World’s vehicle population, however, involves around 6% of the global road traffic mortality. As compared to last year’s data the mortality rate has increased by 1.3% this year.
Though, Both Health and Motor insurance is necessary, however, in this article, we are directed to discuss the need for car insurance for you. Later or on-demand we will cover Health insurance topics also.
Car insurance is important for a variety of reasons. First of all, have a look at the below image showing the rise of deaths in India due to road accidents.
What does insurance mean?
The term insurance means protection. This protection is not absolute however, it provides protection from liabilities or monetary losses in the event of a misfortunate.
For example – A few days back my uncle was on the way to his office in his personal car. Unfortunately, a very tragic collision happened between the Car and a Bike in which a person lost his life on the spot.
The person who died was a police officer. He was also going to his office with one of his female colleagues on the bike.
Since he was a police officer, a strong charge sheet and some false notings were filed against my uncle.
And by taking advantage of this incident the colleague of the deceased/respondent party has also claimed a huge amount of financial compensation in the court.
My uncle had contested this case in the court of session. Eventually, the court instructed my uncle to pay the really huge monetary compensation to the respondent.
My uncle was an honest public servant and this amount was really beyond his economic capacity.
But thanks to his insurance company which settled the claim and paid the monetary compensation to the party on his behalf.
Can you imagine the situation – what if there was no insurance company to settle the liabilities?
He could have sent to jail even without a mistake. His property could have also been confiscated under the Revenue Recovery act 1890.
Read this also: New features of the Insurance (Amendment) Bill, 2021
Why is car insurance mandatory?
Car insurance has become an inevitable need of today due to numerous reasons. Nowadays, drunk driving, hit and run cases are very common in India.
The majority of people don’t follow the traffic rules and often operate vehicles under the influence of alcohol or drugs which raises the probability of road accidents.
Road accidents are the 8th major cause of premature deaths in India. There is a massive increase in grievous bodily injuries and damage to properties of the third party.
It is a bitter truth that people run away after accidents in fear of financial liabilities and let the injured person die on the road. The people who gather after the accident may or may not help the victim due to the unwanted legal consequences.
The quality hospitals run by the Government are very less in numbers. The reachability and availability (too long admission time) are also difficult.
Even though if an injured person is taken to the nearest private hospital, the management is more prone to deny the treatment as most of them are profit-orientated organizations.
The conclusion is that – an injured person more often dies in lack of proper medical care in India than any other reason.
To reduce such discrepancies the appropriate steps should be taken up immediately.
It is necessary that the law enforcement agencies should effectively implement the traffic rules on the grounds.
To accomplish aforesaid objectives the Motor Vehicle (Amendment) Act – 2019, which has recently been passed by the parliament includes compulsory insurance for all motor vehicle owners.
There is a weak execution of traffic laws by the stakeholders – citizens and the governments, which should be checked and corrected as soon as possible
Benefits of Car insurance
Car insurance is compulsory in India for all car owners. Having your car insurance coverage updated on time is a good habit. Car insurance posses the below benefits –
1. Compensates for property damages
Maintenance and repairs of cars are also expensive. If someone breaks your windshield by mistake then you do not have to pay for this yourself as your car insurance company will take care of that expense.
Similarly, in case of theft or fire in your car, the insurance company will compensate you.
2. Protects you from too much liabilities
Irrespective of your careful driving if you get on in a road accident, your car insurance company will bear all kinds of losses and damages to the property of a third party.
The insurance company may meet all expenses arising out due to bodily injuries or damage to the property of a third person. This insurance coverage will also protect you from financial liabilities and unnecessary legal discourses.
As per, Motor Vehicle (Amendment) Act – 2019, Third Party Liability car insurance coverage is mandatory in India.
3. Pays for your medical expenses
Private hospitals are too much expensive in India. Life is very uncertain. Nobody knows what is going to happen in the next moment.
Sometimes, there could be a serious injury in an accident that requires special and long medical care. Hospital expenses are high for these types of treatments. Many people are unable to pay these hefty medical expenses and in that case, car insurance cover can help you by settling these expenses.
4. Provides finacial security to your family
Unfortunately, if someone is only the earning member of the family and loses his life in a road accident his or her family may really suffer to survive or to meet the basic expenses of their life.
This factor alone destroys the social, and economic life of the entire family. In that situation, the insurance company can release the specific benefits and payouts to the deceased family and protects them from further victimization.
NCRB Report showing need of Car insurance
Annual accidents report reveals that road accidents are the 8th major cause of deaths in India. Around 2 lakh people die per year in road accidents.
While evaluating the fatality rate almost 65 – 70% are youths who lose their lives in accidents. 2- wheelers are more vulnerable to bodily injury and mortality in road accidents.
The majority of the accidents occurred on T – points, the road turns, and on Highways where people drive motor vehicles considerably at high speeds.
Motor Vehicle Act for Motor car insurance
As per NCRB recommendations, the Government of India has proposed amendments in the Motor Vehicle Act, 1988 to implement new changes that could align with the immediate necessity of society.
Recently, the Indian Parliament has passed the Motor Vehicle (Amendment) Act – 2019. Section 146 (1) of the said Act states that – no person or a paid employee is allowed to use a motor vehicle in public without a valid insurance policy.
It is compulsory for every motor vehicle owner in India to keep an active insurance policy against third-party risk.
Motor vehicle or car insurance is not only vital because the law mandates it, but also important for us as it is our social obligation.
We all should act as sensible citizens of the Nation. It is our responsibility to form an atmosphere where everybody can feel financially safe even after a tragic event in life.