Why Motor Insurance Is More Important Due to New traffic Rules?
Insurance, as we all know, acts as our savior when uncertainties occur in life. Insurance plays a vital role in indemnifying the insured of any loss or damage. There are various kinds of coverage available, but motor insurance has gained a lot of importance lately, due to the new traffic rules in the amendment.
All About Motor Car Insurance:
Motor insurance, also known as car insurance or two wheeler insurance, is insurance for all kinds of vehicles, from motor cars to trucks. The main agenda behind having motor car insurance is to have financial protection against health injuries or vehicle damage due to accidents or collisions of vehicles on the road. Motor insurance largely depends upon the type of vehicle owned and the amount of coverage that can be paid as a premium amount.
Types of Motor Insurance in India:
- Private car motor insurance: This type of insurance is taken by individuals owning a private car. Buying private car insurance is mandatory in India. The vehicle is covered for damages against fire, accident, theft, natural disasters, and also includes injury to owners, if any. The damages caused to the third parties are also covered under this insurance.
- Two wheeler insurance policy: This type of insurance policy is taken by individuals owning two-wheelers like scooters or bikes. Buying two-wheeler insurance is mandatory in India. The two-wheeler is covered against theft, accidents, damages, etc. This policy also protects the third party and acts as a personal accident cover.
- Commercial vehicle insurance policy: Commercial vehicles are those which aren’t used for personal use that includes busses, trucks, multi-utility vehicles, ambulance, taxis, agricultural vehicles, etc. The policy protects against theft, fire, accidents, natural disasters, etc.
Why Is Motor Car Insurance Necessary?
- Reduces Liability: The third party liability insurance reduces liability against legal ramifications of an accident caused by the insured. The insurance will get them financially covered.
- Protects against damages: Insurance protects the insured if the car has collided with some other vehicle or even a part of the car is damaged due to collision or natural disaster. As car maintenance is expensive, car insurance helps the insured save a lot.
- Hospitalization expenses cover: If the insured is injured during the car accident, insurance pays for the hospitalization expenses too.
Impact of New Traffic Rules On Motor Car Insurance:
- Premium amount changes: As per the new traffic rules, the net outflow will be more, resulting in an increase of lump sum premium payment and no annual premium payment. IRDAI has fixed tariffs for third party premiums.
- TP tariff rates increase: Except for new cars below 1000cc premium for all other vehicles have been raised.
- Premium Paid: Though premium paid will be recognized as per year, the premium for the entire term has to be paid at the time of purchase of the insurance policy.
As you can see, the new traffic rules have made motor insurance more important for drivers, but have also diversified the way in which one buys insurance and the options that one can avail. This means that buying motor insurance will allow you to experience both digital as well as on-road benefits. Before buying any policy, it is advised to go through the covers included.