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What is the Importance of Car Insurance Policy

By Vikas Chandra Das
21 July 2022, 11:46 AM

When it comes to buying car insurance, the first question that usually arises in mind, i.e. why do we need it? What importance does it have and how beneficial is it to avail? Just to clear your thought, according to the Motor Vehicles Act, 1988, it is mandatory to avail of car insurance(third-party) for a minimum of 3 years. 

Invalid car insurance can lead to hefty fines and imprisonment as well. Availing car insurance not only gives financial protection against third-party loss or damage but also provides self-protection. It also gives peace of mind and a sense of security to a policyholder hence reduces worry. To have better clarity on the topic, read the article below.   

What is the Importance of Car Insurance

The reason why car insurance holds so much importance is because it helps in getting financial protection against various mishaps. Based on your needs and budget the car insurance is classified into a various categories-third party, comprehensive and pay as you drive. However, amongst all the insurance policies, third-party car insurance is mandatory to opt for. It gives financial protection against third-party legal liabilities only. This policy provides the basic cover so that at least in case of a third-party loss or damage, you will be insured financially.  

Reasons to Avail Car Insurance-What Makes it Worth 

There are some prominent reasons because of which the government has decided to make car insurance mandatory for all. Take a look at those reasons below:

  • Large Number of Road Accidents: According to the National Crime Records Bureau(NCRB) in the year 2019 total number of road accidents were 4,37,396. Out of which 1,54,732 were death cases and the remaining 2,82,664 were related to bodily injuries. To raise a sense of awareness and responsibility in the public so that they drive carefully, the provision of making car insurance mandatory came into existence.

You as an individual are not only responsible for yourself but the lives of others as well. Thus, with the intention to decrease the number of road accidents/mishaps, it was made mandatory for all to own car insurance. 

  • Making Legal Process Easier: It is easy to manage legal proceedings once you have a car policy in place. It is important to have everything documented in a structured manner as it reduces the time and energy of all. Especially, in the claim settlement, it would be easy to process things further, if everything is documented nicely.
  • Financial Cover: With the help of valid car insurance your finances will be taken care of. Be it third party, comprehensive, or pay as you drive policy, getting financial assistance is confirmed. You will get financial cover from your insurance company against situations like accidental death, bodily injuries, third-party property damage, and damages that happened to the car due to theft, fire, natural & man-made calamities, etc.
  • Easy to Buy Online: It is very easy to buy car insurance online. You just need to follow a few simple, quick and easy steps. With many insurance companies available online, the process has become quite easy and seamless. Without physical documentation, you would be able to purchase your car insurance in a hassle-free manner.
  • Sense of Protection & Peace of Mind: Once you have a car insurance policy, you can have a sense of protection as well as peace. You can drive without any worry as your financial burden will be taken care of by your car insurance company.
  • Makes You a Responsible Citizen: Owning a valid car insurance policy also makes you a responsible citizen. It shows that you not only care for yourself but are also responsible for other lives.
  • Keeps You Away from Paying Hefty Fines: Another prime reason to buy car insurance is that it keeps you away from heavy fines. In case you get caught without valid car insurance, it would not only be a big burden on your pocket but you may also have to face imprisonment.
  • Discounts and Perks: Car insurance also comes with lucrative perks in the form of add-on covers and discounts which you get with your policy. Some of these discounts are- NCB and Voluntary Deductibles, wherein a policyholder can get amazing discounts on the premium. Thus, it makes car insurance affordable while enjoying special perks.


Owning a car insurance policy has a lot of importance as it not only gives you financial protection but it also makes you a responsible person so that you drive carefully. Apart from this, car insurance also offers a list of amazing benefits to make your car insurance journey enjoyable.

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