The Government of India has placed multiple safeguards for the safety of the general public to protect them. Road accidents are a common occurrence in India. More so, they sometimes cause irreversible damage in the form of fatalities. To avoid extra costs, people often skip on purchasing any kind of insurance in general and do not follow traffic rules when they should.
Why Motor Insurance is mandatory in India
As a result, it is mandatory for all vehicle owners in India to own insurance, to protect themselves, as well as the people around them. Some accidents only cause damage to vehicles, but others lead to serious injuries, loss of property and even death. Without adequate insurance, covering the costs of such incidents becomes a heavy financial burden.
Keeping this in mind, the Government of India has made it mandatory for every vehicle owner, may it be for personal use or commercial, to own third-party insurance, as well as a Personal Accident Cover worth a minimum 15 lakh. In case of death, these policies provide financial assistance to the policyholders as well as the third party.
In case of an accident, a third-party insurance provider covers financial help for the family of the deceased. However, the judiciary decides the amount of the compensation, depending upon several factors. The meaning of a ‘third-party liability’ essentially is to provide the insured with financial assistance in case of an accident caused by their vehicle.
What is Comprehensive Motor Insurance?
A comprehensive motor insurance provides compensation to the owner-driver of the vehicle in the case of death. Every vehicle owner is required to have a personal accident cover in order to provide for their medical bills in case of an injury/bodily harm caused due to an accident. In the case of death, the insurer provides compensation to the family of the policyholder. In this case, the existing policy is transferred to the legal heir of the policyholder.
What is Personal Accident Cover?
A PA cover particularly provides financial cover to the policyholder in case of injury/loss of limbs/disability or death caused by a violent event and/or accident caused by vehicles, machinery, natural/manmade disasters, etc.
Although it is mandatory to purchase a PA cover while buying a vehicle in India, but if you already have an existing policy, it is not required. A PA cover is generally clubbed with a comprehensive motor policy but it is available as a separate policy as well.
Thousands of road accidents take place on a daily basis in India, causing innumerable losses to people. In some cases, the claims get rejected as well, which causes further distress to the policyholder. Although sometimes it might not be in our control to avoid an accident, but we can try to minimise our losses. Money cannot replace a precious life, but it can help the bereaved family cope with their future expenses, especially when the deceased is the sole earner of the family. The Government of India has provided assistance for its citizens, and as responsible individuals, it is essential to ensure compliance.
