Car Insurance in India: 5 Important Reasons You Need It

The amended Motor Vehicle Act in India, which came into effect from 1st September 2019, drastically increased fines and penalties on a number of traffic violations. Driving without car insurance is one such offense that carries a hefty fine.

Yet, across India, you will find tens of thousands, perhaps hundreds of thousands of vehicles that drive around nonchalantly without automobile insurance.

Don’t do that!

In this article, we highlight some pointers which will compel you to ensure that you always have valid insurance in India when hitting the streets in your car.

1. Car Insurance Covers Damage to your Vehicle

Car insurance, by and large, does cover physical damage incurred to your vehicle. However, there are some riders attached to the extent of damage covered, the circumstances in which damage occurred, as well as, the vehicular parts that are covered.

Therefore, when you drive around without car insurance and there is significant damage that occurs to your vehicle, you will have to pay for the repair work out of your own pocket. Taking this risk is really not worth it.

2. Protecting Against Increasing Instances of Car Theft

Car theft is increasing rapidly in India. The NCR or National Capital Region of the country is especially prone to car theft frequently, as are some other urban pockets.

Car insurance protects you in the event of car theft. The insurance company will compensate you for the value of the vehicle as per its IDV or ‘Insured Declared Value’ which is pre-determined.

Otherwise, imagine yourself in a scenario where you have recently bought a car which gets stolen and you do not have car insurance on it. You will have to continue paying EMIs on it (if you availed an auto loan for it) or you may completely lose the money you invested into the vehicle if you already paid in full for it!

3. Personal Accident Insurance Cover

Auto insurance goes beyond simply providing coverage against damage or theft. It also provides financial protection in case of an unfortunate accident.

As it is, Indian roads are among the most dangerous in the world, with the maximum number of fatal road accidents reported in our country. Without automobile insurance, you would be privy to paying for any personal accidental injury, dismemberment, etc. out of your own pocket.

This is a risk that is simply not worth taking.

Car Insurance
Car Insurance in India is often ignored even though it is an absolute must!

4. Third-Party Insurance Cover

Car insurance not only protects you personally but also others in your vehicle. Alongside this, it also provides protection to and from others on the road. This is referred to as third party car insurance which you have to opt for while availing car insurance in India.

This is an ideal car insurance policy which is always recommended over standalone car insurance. After all, most occurrences on the streets take place because of others. Or there could be a scenario where you have caused harm to others while driving; third party car insurance will provide cover for that as well.

5. Reasonable Costs of Car Insurance in India

The advent of multiple players in the vehicular insurance market in India has meant that prices for auto insurance have come down to reasonable levels.

This is yet another reason for which you are left with simply no excuse for opting out of automobile insurance. With insurance being affordable and, not to forget, compulsory, you simply cannot afford to ignore car insurance under any circumstances.


There is clearly an entire barrage of reasons for which automobile insurance is absolutely compulsory. Don’t let the new, hefty fines under the Motor Vehicle Act in India be the sole driver for you to go ahead and obtain car insurance. As shown in this article, there are ample reasons for you to do so!

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