Significance of a motor vehicle insurance policy


02 Aug 2023

Learn all the benefits a motor insurance policy has, aside from financial security.

Importance Of Motor Vehicle Insurance Policy In India

Owning a vehicle is no longer a luxury, but is more of a necessity. A vehicle enhances your mobility and reduces the need to depend on public transportation. However, driving on Indian road comes with its own set of perils. Lack of discipline while driving and bad condition of the roads often increases the risk of an accident. Such an unfortunate event may result in damage to your vehicle and may also cause bodily injuries as well as death.

According to a report on road accidents published by the Transport Research sector under the Ministry of Road Transport and Highways, an average of 413 people died on a daily basis in 2016 as a result of 1,317 road accidents every day.

In order to financially protect yourself from such incidents, you may consider investing in a car insurance.

A comprehensive motor insurance policy offers a plethora of benefits. Following are five major advantages of such a plan.

Offers coverage for damage to Your Vehicle

The risk of damage to your vehicle during an accident cannot be eliminated. The cost of repairs is indeed an expensive affair and may burn a huge hole in your pocket. Purchasing a motor insurance policy prevents such out-of-pocket expenses as your insurance provider will bear a substantial percentage of the cost of repairs.

Provides Accidental coverage

In case of severe bodily injuries or fractures, you may require treatment at a hospital. A motor insurance plan financially protects you against exorbitant medical costs. It covers all hospitalization expenses, thus allowing you to focus on speedy recovery, instead of worrying about finance.

Reduces your liability

According to the Motor Vehicles Act, it is mandatory to purchase a third-party liability insurance policy in India. This type of insurance policy reduces your liability in case an accident is caused by you. The insurance provider covers all damages caused to third-party property or injuries caused to a third party. Besides, you are covered from the legal repercussions, if a case is filed against you.

Compensates the family in case of death

Accidents may result in an unfortunate death of the vehicle owner. The family may face financial difficulties in an event of the demise of the policyholder, especially if he/she was the breadwinner of the family. Motor vehicle insurance plans provide a lump sum amount in an event of death. This amount may be used by the loved ones to meet their financial obligations.

Offers coverage for natural and man-made calamities

A vehicle insurance plan also provides financial protection against natural calamities such as flood, typhoon, cyclone, hailstorm, and hurricane, among many others. It also offers coverage against man-made activities such as terrorism, fire, and strikes.

The aforementioned points show that a motor insurance plan is indeed significant for every vehicle owner.

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  • Written By: Eswaranatarajan N, Senior Executive Vice President & COO

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.