Why Motor Insurance Often Eludes Customers

Vehicle insurance can save you from financial burden in case of accidents

- Nirmala Konjengbam

When buying a car we mostly focus on specifications, features, and gadgets, often ignoring the importance of motor insurance.

It is rather surprising that most vehicle buyers or even owners often choose not to opt for motor insurance and perceive it as a waste of money, while many are also willing to risk the penalties of driving without insurance, probably just to save a few thousand rupees in a year.

As per a mandate under the Motor Vehicles Act, 1988, every vehicle owner is entitled to a motor insurance policy that will cover accidental death, bodily injury or damage to property. Also, Insurance Regulatory and Development Authority of India (IRDAI) has recently mandated that all new vehicles should have a long-term third party cover to address high Lapsation and take care of other mandatory aspects of insurance.

Commenting on the importance of motor insurance, Rakesh Jain, Executive Director and CEO, Reliance General Insurance, said, “One should look at the wider protection aspect against any unfortunate event. Basic insurance policy does provide for your vehicle’ protection, however, there are certain exclusions, terms, and conditions, which restrict the benefits to customers like deduction of depreciation on parts replaced and consequential losses.”

A third party policy, on the other hand, only covers the damages done to the third party or his or her property. It does not compensate for the damages done to your car. However, you can always add riders to the policy for complete protection.

Pointing out the importance of buying a comprehensive policy to widen the coverage, Jain added, “While considering add-on covers, one should keep in mind the need of it. For instance, in a flood-prone region, one should always consider buying engine protects or hydrostatic lock covers as an add-on. However, the same is not required if precipitation of rain is normal in your region.”