Why Is Car Insurance More Than Just A Mandatory Document?

Whether it is a road trip or your regular commute, there are a few things that you always make sure you have with you – driver’s licence, wallet, phone and of course your car insurance papers or digital form of this document in a Digi-Locker.

The first three seem “essential” to have at all times, many people think car insurance is just some mandatory document that you need to produce in case you get pulled over.

While this is true – insurance papers can prove ownership of the car – it’s vital for so many other things. And this Insurance Awareness Day, you need to understand why it’s more than a piece of paper.

Why Have Car Insurance?

To understand the importance of car insurance, you must first know how it works.

It’s rather simple; you pay a certain amount annually to an insurance company, and in return, you are assured of compensation for potential damages to your car that may occur during that year. Car insurance can cover monetary damages from measly bumper scrapes and substantial ones like your car getting stolen.

There are a variety of covers available to protect your car and you from an exigency. The most popular among them is a comprehensive plan, also called zero depreciation or Zero-Dep insurance, that cover almost everything. Some add-ons to policies cover specific car parts to ensure better protection of your vehicle. A number of vehicle owners also opt for third-party insurance, which only covers liabilities for inadvertent damage to other vehicles, people or property.

You are rewarded for years when you don’t make claims. Insurance companies offer a no-claim bonus which reduces annual insurance premium by up to 30% for the year when you didn’t raise any claims.

Here are a few instances where car insurance can come to your rescue. Read on:

Natural Calamity

While you may be able to shelter indoors during heavy rains, storms, earthquakes and other natural calamities, it may not always be the case for your car. This puts it at risk of getting damaged during such events. However, a comprehensive car insurance policy can cover damages and losses caused by a natural calamity.

There are also add-ons that you can include in your insurance policy for coverage against specific situations, such as flood damage and engine protection. You can even cover consumables such as AC gas, washer, fuel filter, etc., which can probably save you thousands or lakhs should these parts get damaged.

If you are a Ford owner, you can purchase the Ford Protect extended warranty. It can provide coverage for damage to your Ford car’s engine, gearbox and other electricals.

Accidental Damage

Sometimes, through no fault of your own, you could end up in an accident, either while driving on an open highway or if parked on the side of the road. In such situations, the insurance covers not only damage to your car but also its occupants, should they succumb to injuries. Now, accidents don’t always happen while driving. So, an insurance policy can come to your rescue in events where your car may get damaged from electrical issues or a manufacturing glitch.

Once again, the Ford Protect program can help you in such situations. You can opt for this extended warranty for up to three years to cover mechanical and electrical breakdowns without bearing the brunt of inflation from rising costs of parts and labour. More importantly, you can be sure that the parts you get are genuine Ford ones.

Car Theft

Car thefts may not be as common as bike thefts; however, they are still a problem. While your car may be enabled with modern security features, it does not hurt to add a little more protection to this financial asset of yours. And your insurance policy can provide that. Should your car get stolen, your insurer will cover the car’s value at the time of its theft, and this can provide a substantial financial respite!

Third-Party Damage

In the event of an accident wherein, a third party gets injured or their property damaged, your insurance policy can compensate them for that too. So, if that third-party files a claim against you, your insurance policy will take care of the financial and legal liability, thereby protecting you from all the trouble.

Unexpected Breakdown

Let’s say you are on a road trip with your family, and your car suddenly breaks down on an unfamiliar or deserted place. You haven’t seen any human habitation for miles. Worse, what if this happens at night? What do you do?
Well, in such a situation, your car insurance would cover costs for Roadside Assistance (RSA), either by providing such service through a vendor or compensating you later. This service ensures you get help in the form of a mechanic, wherever you are, to get your car working again. And if the issue is a major one, your vehicle will be towed to the nearest workshop, and you too will be escorted safely. And the cost of this is taken care of by your insurance provider.

These are some of the ways in which your car insurance can ensure more protection than you realise. Apart from these, it can also provide cashless garage service, compensation of damages caused by fire, aid during car loss from man-made calamities and others. Therefore, it is safe to say that your car insurance is as essential as your car. So, this Insurance Awareness Day, take the time to acknowledge the importance of your car insurance and make sure to get the right protection for it.