Why it is Compulsory to have Car Insurance in India

1. Provide injured third parties with medical attention: The cost of hospital care can be high in the event of a third-party injury in a car accident. If you have third-party coverage, the third party receives the necessary care because the insurance company covers the cost of the treatment.

1. Ensures financial security for the driver: If the owner-driver suffers injuries that result in a permanent disability, they will immediately lose their ability to work. In this case, they receive financial compensation from their car insurance provider.

1. Makes sure damaged property is repaired: If a driver hits a car, they will be held responsible for any damage to the other car. However, if they have third-party coverage, their insurance provider will cover the third party's repair expenses.

1. Covers hospital costs: Even small medical visits to the hospital can result in substantial bills. In such situations, car insurance covers the financial burden of medical bills. When the owner-driver has comprehensive coverage, they can also be sure they will receive medical care without having to worry about how they will pay for it.

Benefits of Car Insurance

In India, having car insurance is crucial given the large number of accidents that have occurred in recent years. Some of the benefits of car insurance are as follows:

1. Financial security is the main advantage of car insurance. According to the policy, insurance coverage may help with paying for medical bills, repair costs, or even legal liabilities in the case of an accident.

1. You are covered in the event that an accident, fire, or self-ignition causes damage to your car. Additionally, your insurance covers losses to the vehicle brought on by terrorism, strikes, riots, or theft.

1. The provision of personal accident coverage for a particular sum is another benefit of car insurance. Protection against death from an accident and permanent total disability is offered by personal accident insurance.

1. Car insurance offers an important benefit called no claim bonus (NCB). For each claim-free year, you can claim this benefit. This could be offered as a premium reduction, further lowering the cost of car insurance.

Violation of rules laid down by the Motor Vehicles Act have serious consequences or penalties. Most of us may have experienced these consequences at some point in our adult lives. However, we may not be aware of the full range of penalties which follow the violation of the rules of this Act. These include:

1. Violation of the any provisions of the Motor Vehicle Act could attract a fine of Rs. 1000 and/or could also result in the defaulter's imprisonment for up to 3 months.
2. Any person found flouting the rules could have their driver's licence suspended.
3. Following a violation of the law, the defaulter's vehicle registration could also be suspended.

Certificate of Insurance:

The Certificate of Insurance is an official certificate which is issued by the insurance company under the provisions of Rule 141 of the Central Motor Vehicle Rules 1989. This certificate must compulsorily be provided to you by your company, regardless of the type of car insurance policy you are getting renewed or are purchasing. The Certificate of Insurance is a separate document which is provided in addition to your policy document.

The Certificate of Insurance provided is issued in the format of Form 51 and contains all details pertaining to your car insurance policy. Following are the details included in the Certificate of Insurance.

1. Certificate Number.
2. Policy number of the car insurance policy.
3. Registration mark of the vehicle that is insured.
4. The model and manufacturer of the vehicle.
5. Chassis number of the vehicle.
6. Carrying capacity i.e. the number of passengers that your vehicle is built to accommodate.
7. The car insurance policyholder's name and address
8. The date and time from when the insurance policy has commenced cover.
9. Date when the policy expires.
10. Rules regarding the persons who are allowed to drive the vehicle without attracting legal penalties.
11. Policy limitations regarding the usage of the insured vehicle.

The Certificate of Insurance must always be present with the driver of the vehicle. This document will need to be presented during a traffic police inspection, in addition to the driving licence and certificate of registration of the vehicle.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017