What is car insurance and why is it important?

What is car insurance?

Car insurance, also often called motor insurance, compensates you against financial loss incurred to your vehicle from unforeseen risks, which include accidents and theft. In exchange for a premium paid by you, the insurer grants you compensation as agreed in your policy.

Driving is not without danger; it would not be incorrect to say that driving could be hazardous and, in worst cases, can also be fatal. Various studies prove that traffic accidents are one of the major causes of deaths across the world. According to the World Health Organization, a whopping 1.35 million people die each year as a result of road traffic crashes, and between 20 and 50 million more people suffer non-fatal injuries.

Can you now imagine how risky driving could be?

Hence, most nations today have made car insurance mandatory. This is because the government wants all parties, which include both the driver and the victim, covered in case of an accident, reducing any risk to all parties involved. So apart from just protecting you, it also protects others that might be harmed as a consequence of your actions and vice-versa.

Here are a few reasons to help you understand why car insurance is important.

It compensates for any damage to your car due to natural or man-made calamities

You never know when a catastrophe can strike you, and it is always a good idea to be proactive and reduce any financial risk that you might face consequences.

A comprehensive motor car insurance policy protects you from financial losses incurred to your car as a result of natural disasters such as floods, earthquakes, cyclones, and storms. Further, man-made perils such as burglary, road accidents, riots, and civil commotion are also covered.

It provides you with personal accident coverage

Many times, road accidents can have grave repercussions such as fractures or major injuries that require hospitalization. In such cases, car insurance can pay for these expenses, mitigating any financial strain and distress.

It protects you against third-party liabilities 

In the unfortunate event that you are involved in an accident, car insurance compensates for any damage caused by you to the property and vehicles of a third party. Also, it covers any legal liabilities that you would face as a result of bodily injury or harm to a third party, so, you are unaffected by any legal ramifications of such an accident.

It issues passenger and driver coverage

Many times, an accident can cause bodily harm not just to you but also to the other passengers in the car. Apart from providing insurance for yourself, a robust car insurance policy also covers a licensed driver or passengers in your car.

It provides emergency roadside assistance

If there is an unexpected breakdown of your car, car insurance will ensure that you are not stranded. It provides you with roadside assistance and facilities such as towing your car to the nearest garage for repair.

It can supplement your health insurance

Expansive car insurance can compensate for any injuries that you have incurred as a result of an accident that a regular health insurance policy might not. For instance, comprehensive car insurance might cover dental treatment that you might have to undertake due to a road accident. Thus, it acts as a supplement to your medical insurance policy.

It provides you access to a large number of garages

Most insurance policies maintain a comprehensive network of garages that help you repair your cars using the cashless facility, making such repairs convenient and easy.

It provides benefits to the family in case of a fatality

If the insured person loses his life in the event of an accident, car insurance also provides compensation to the family of the deceased.

It covers damages to the vehicle in transit

Car insurance also provides off-road coverage. This means that if your vehicle is damaged in transit via road, rail, or air, any damages to it will be compensated for by the insurer.

Don’t you think these are good enough reasons for you to purchase a car insurance policy? Go ahead, and buy a robust policy and you shall be assured of peace of mind and security when driving in your car!

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