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Motor insurance: 5 reasons why you will need it during a crisis

“Why go for a car insurance when you have a third-party car insurance?” Anil tells Prateek with an air of authority. Anil made the remark when his friend asked him whether he should get a car insurance. Prateek had recently bought his first car. He wanted to ensure that his prized possession got all the attention it deserved.

It’s true that all car owners have a third-party insurance. It has been made mandatory by the government after all. But the point Anil missed was that such a plan can only be activated if you were at fault while driving.

So, what happens if his car was dented or mangled in an accident? What happens if it gets stolen? The third-party insurance can only remain a bystander in such cases. This is why a car insurance is critical. It can bail you out from such situations. So, what are the upsides of a car insurance?

1. Accident cover

The car insurance ensures your family is compensated in case of death or disability in an accident. It can also offer compensation for death or bodily injury when you can’t claim from a third party. This may not be included on all car insurance policies, but may be offered as a rider.

The compensation amount, however, will depend on what cover you had opted for. So, read your insurance plan carefully before you sign on the dotted line. If there is something amiss, you can ask the insurer to add a rider.

2. Protection from natural calamities/theft

A car insurance can be of great comfort in case your car is destroyed in a natural calamity. It also covers collaterals losses from natural disasters. The insurer also compensates if your car is stolen. However, you must check what the policy covers before opting for it.

3. Cashless garage network

Most car insurance companies have a network of garages. They can repair your car in case of damage. This reduces the cash burden and the stress you endure when your car gets the blues. This way, you can avoid paying out of your pocket to get your car repaired.

All you need to do is to inform the insurance company. They will then probe the matter and once that’s done, they’ll pay the repair amount on your behalf.

4. Vehicle repairs and lawsuits

A comprehensive car insurance also covers lawsuits in case of an accident. The insurer hires an attorney to represent you in a lawsuit as well as other expenses concerning the lawsuit. This may be automatically included in your insurance or can be bought as a rider.

5. No claim bonus (NCB)

The NCB is a benefit you get for making no claims during the policy period. You can transfer the NCB to another vehicle if you decide to buy a new car. This results in lower premium on renewal, thus saving you a considerable amount of money. The discount increases every claim-free year and can go up to 50% at the end of five such years.

However, it should be noted that the car insurance does not cover losses due to wear and tear, breakdown, war hazards or accident due to drunken driving.

To sum up

Coming back to Prateek’s question, simply having a third-party cover won’t suffice. A car insurance, on the other hand, can ensure you are covered in crisis situations.