5 Benefits of Car Insurance, As per the Motor Vehicles Act,
5 Benefits of Car Insurance – a third party insurance is mandatory and you have to buy a vehicle whether you buy a new or a used vehicle. You can also buy a vehicle cover.
The former type of insurance protects you from financial and legal liabilities towards any third party. On the other hand, a comprehensive insurance policy provides cover to your vehicle against damage caused due to accident, fire, theft, cyclone, flood etc. With this cover, it covers the liability of any third party. Here are five major car insurance benefits.
1. Damage or loss to the insured vehicle
If your vehicle is damaged due to an accident, fire or self-ignition, you are protected. Also, if the car is damaged due to theft or theft, strike, riots or terrorism, your insurance policy covers these. Another advantage of car insurance is that it covers loss or damage caused during transit by rail, inland waterway, air, road or lift.
2. Personal Accident Cover
Another advantage of car insurance is that it provides personal accident cover for a pre-determined amount. Personal accident cover provides protection against permanent total disability, death due to accident. Also, this cover can be taken on an undisclosed basis to other passengers (maximum as per the seating capacity of the vehicle) for a pre-determined amount under the car insurance policy.
3. Large network of garages
HDFC ERGO Car Insurance maintains a large network of garages across the country. This ensures that you get cashless services at all these locations when the need arises. This feature makes it convenient to avail repair services in case of any damage to your vehicle.
4. Third Party Liabilities
If your car is involved in an accident that results in loss or damage to the property of a third party, it is covered under car insurance. Also, if you face any legal liability in case of bodily injury or death of a third party, your car insurance protects you against the same.
5. No Claim Bonus
One of the major benefits of having car insurance is the No Claim Bonus (NCB). The subscriber is eligible for this benefit for each claim-free year. This may be available as a discount on premium, which makes car insurance even more affordable.
There are two factors you should consider when choosing car insurance among different insurers.
1. Quick and hassle free process
When you choose to buy a car insurance policy, it is important that you do not have to go through a lengthy and cumbersome process. The whole process should be simple, quick and convenient. Also, it is recommended to choose an insurer that offers the added convenience of buying a policy online.
2. Customer Support
A reliable and reputed insurance company hires trained and experienced personnel to help resolve all your queries. Insurance companies also offer live chat to ensure your problems are resolved without any delay.
Having a car insurance policy gives you peace of mind. You are assured that you will not face any financial hardship in case of any loss or damage to your vehicle or third party.
Why should you get car insurance
Getting car insurance is important for several reasons, including:
- Legal Requirement: Car insurance is a legal requirement in most states. Driving without insurance can result in fines, license suspension, and even legal trouble.
- Financial Protection: Car accidents can be expensive, and car insurance can help protect you from financial losses resulting from accidents or theft. Depending on the coverage you choose, car insurance can help cover the costs of repairs, medical bills, and legal fees.
- Peace of Mind: Knowing that you have car insurance can provide peace of mind while driving. You can rest assured that if you get into an accident, your insurance company will be there to help you through the process.
- Protection for Others: Car insurance not only protects you, but it also protects others who may be involved in an accident with you. Liability insurance, which is required in most states, can help cover the costs of damages or injuries to other people and their property.
- Additional Coverage: Car insurance policies can offer additional coverage beyond liability insurance, such as collision coverage, comprehensive coverage, and uninsured motorist coverage. These options can provide additional protection for your vehicle and your finances.
Some Disadvantages of Car Insurance
While car insurance is important, there are also several disadvantages associated with it. Some of the disadvantages of car insurance are:
- Cost: Car insurance can be expensive, especially if you opt for comprehensive coverage or have a history of accidents or traffic violations. The cost of insurance can be a significant financial burden, especially for young or inexperienced drivers.
- Deductibles and Co-Payments: Car insurance policies often require policyholders to pay a deductible or co-payment before coverage kicks in. This can be a significant expense, especially if you have a high deductible or are involved in an accident.
- Exclusions and Limitations: Car insurance policies often have exclusions and limitations that can limit the scope of coverage. For example, your policy may not cover damage caused by certain events, such as floods or earthquakes.
- Claims Processing: Filing and processing car insurance claims can be a complicated and time-consuming process. This can be especially challenging if you are dealing with injuries or a totaled vehicle.
- Premium Increases: Car insurance premiums can increase over time, often due to factors outside of the policyholder’s control. This can make it difficult for individuals to budget for insurance expenses and can lead to financial strain.
- Fraud: Car insurance fraud is a major problem that can increase premiums for everyone. Fraudulent claims can also lead to legal consequences and loss of coverage.
- Limited Options: Car insurance options can be limited based on your location or driving history. This can make it challenging to find affordable coverage or coverage that meets your specific needs.
What does “full coverage” actually mean?
There’s no formal definition for “full coverage” since it’s not a real auto insurance term. But it typically refers to a policy that has liability coverage plus comprehensive and collision. That way, you’re not only covered if you have to pay for someone else’s injuries or repairs but also for repairs to your own vehicle.
Remember, you won’t see the term “full coverage” on an auto policy. When you get a quote, for instance, you’ll instead see a list of auto insurance coverages available to you, depending on your state and other requirements.
Car insurance coverage options at a glance
To start, it may help to understand common types of car insurance coverage and whether they’re required or optional. Check out the following chart, then get explanations on what each coverage does below.
Liability coverage is typically included in all auto insurance policies, as it’s required by law in most states. Bodily injury liability coverage helps pay for another person’s medical expenses if you cause an accident. Property damage liability coverage helps pay for damage you cause to another person’s property in a car accident.
Each state sets minimum liability coverage limits that drivers must purchase. Typically, the liability coverage in an auto insurance policy will contain three limits:
- The maximum payment for bodily injury per person
- The maximum payable for bodily injury per accident
- The maximum payable for property damage
You may want to go beyond the state requirements and buy a policy with higher liability limits. Higher coverage limits typically mean you’ll pay higher premiums, but you’ll have more protection if you cause an accident.
Comprehensive and Collision Coverage
If you are still paying off an auto loan or if you have a lease on your vehicle, your lienholder or financing company usually requires collision coverage and comprehensive coverage. Otherwise, if your vehicle is paid off, these two coverages are typically optional on a car insurance policy.
Collision coverage helps pay to repair or replace your vehicle if it’s damaged in a collision with another vehicle or object (such as a fence). Remember, collision coverage helps protect your vehicle, while property damage liability helps pay for damage you cause to another driver’s vehicle.
Comprehensive coverage helps pay to repair or replace your vehicle if it’s stolen or damaged by things like hail, animal damage or vandalism.
Comprehensive and collision coverage each have deductibles and limits. A deductible is the amount you pay out of pocket toward a covered claim. A limit is the maximum amount your insurance will pay out for a covered claim.
Rental Reimbursement Coverage
Rental reimbursement coverage helps pay for a rental car while yours is being repaired after a covered loss. Be sure to check the coverage limits — typically, rental reimbursement pays up to a certain dollar amount per day, for a set number of days.
Uninsured and Underinsured Motorist Coverage
Uninsured motorist coverage helps protect you against drivers without insurance. If you’re injured in an accident caused by another driver, that driver’s liability insurance will usually help cover medical expenses you incur — unless that driver doesn’t have auto liability coverage. In that case, your uninsured motorist coverage would help pay for expenses related to your injuries.
Underinsured motorist coverage works similarly: It takes effect if the other driver who caused the accident has insurance, but their liability coverage limits are lower than the limits that trigger underinsured motorists coverage in your state. Check your state’s insurance requirements or ask your agent for more information about this coverage.