Why is it mandatory to have vehicle insurance

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Vehicle Insurance
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Why is it mandatory to have Vehicle
insurance?   Vehicle insurance is an integral
part of your motor. Although, it's a recurring
annual expense, you can make a huge savings in
the annual premiums. Hence, it would be a good
idea to be well aware of the nitty-gritty of such
motor policies.
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There are two types of vehicle policies Third
Party Comprehensive vehicle policy. Third party
refers protection cover for the damage done to a
third party into an event of an accident, such as
injury or death or damage to his or her property
on account of any accident caused by your
vehicle under Third Party insurance. It also
includes personal accident cover for the
owner-driver. However, it doesn't cover any
damage to your motor. As per the law, it is
mandatory to hold at least third party cover to
driver your motor on roads.
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A comprehensive is a protective cover for your
vehicle as well. It will provide you both third
party and own damage covers. Taking cover for own
damage is not mandatory but it will be proves
quite helpful as it takes care of your financial
needs during emergency. Therefore, it is
advisable to cover for damages to own the vehicle
too. The risks covered are natural disasters such
as earthquake, flood, storm, etc. Man-made
disasters such as accident, theft, fire, riots,
malicious act, etc.
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Every vehicle is insured upon a value based on
the manufacturer's price of the vehicle minus the
depreciation as per the vehicle's age known as
Insured Declared Value. The damage to third party
property is covered up to a sum of Rs 7.5 lakh
for car and Rs 1 lakh for two-wheeler. And there
is no such limit on the cover for injury or death
to the third party. The premium on your Vehicle
Insurance policy is determined on various factors
like model, capacity, age, fuel type, city you
stay in, your age, profession, security aspects,
claim experience and lastly modifications
made/accessories added to the vehicle.
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One of the most common ways to save premium is
the No Claim Bonus (NCB), where you can get a
discount on your premium if you haven't made any
claim in the prior years. These discounts can be
increased with each successive year of zero-claim
and goes up to as high as 50 to 60. It is
advisable don't claim for petty dents or small
scratch and utilized your No Claim Bonus, instead
accumulate these bonuses and utilized for higher
discount premiums. Another way to reduce premium
would be installing safety devices, having
membership of an automobile association, choosing
higher deductibles, parking in garages or safe
area, etc.
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You can always enhance the protective cover by
opting for add-on to insure for risks that are
not covered under a standard policy. Some
common-add on would zero depreciation, no-claim
bonus, hospitalization, etc. Some insurance
companies offer the cashless facility if the
vehicle is repaired at their authorized garages.
Else, you can repair at your preferred garage and
then claim reimbursement from the insurer.
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There is some standard exclusion such as normal
wear and tear, mechanical or electrical
breakdown. If the person driving the vehicle
doesn't have a valid license or driving under the
influence of alcohol or drugs, you may not be
able to claim vehicle insurance. You can change
your vehicle insurance provider without losing
the benefit of any no-claim bonus that you may be
eligible for.. Source http//www.articlesbase.co
m/finance-articles/why-is-it-mandatory-to-have-veh
icle-insurance-7480242.html
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