Food, clothing and shelter have been the basic human needs. Owning a car was considered a luxury until few years back. It was something only the affluent possessed. However, owning a car is no longer a luxury. With easy car loans and re-payment through installments with flexible term of loan, it is no more a herculean task to buy a car. And thus comes in the various risks associated with a vehicle. One of them being, losses incurred due to accidents. Hence the need for car insurance becomes even more important. After all, you don’t buy a car every other day!
According to the Motor Vehicles Act, 1988, every car plying on the Indian roads should have a valid insurance cover. A newly bought four wheeler has the on-road price quoted inclusive of the premium towards the insurance company. However, this insurance is subject to renewal in a year’s time. The consequence of driving without four wheeler insurance or an insurance that has expired is severe and involves legal implications.
- Hefty Fines: According to the Road Transport and Safety Bill, 2014 which replaced the Motor Vehicles Act, 1988 heavy penalty is imposed on the vehicle owners if the vehicle is caught on the road without a valid insurance cover. The fines can go up to INR 3,000. The cost of driving a four wheeler without a valid insurance cover can also lead to imprisonment for three months. The consequence could also include cancellation of the four wheeler registrations and suspension of the driving license.
- Losses to third party: Any damages made to the surroundings or the other vehicle in case of an accident are categorized under third party losses. The vehicle owner is liable to pay for the losses due to damage. If the accident causes any physical injury to the other vehicle’s owner, the liabilities would multiply. Driving without a valid four wheeler license would burden you with the liability of paying for the losses. A valid car insurance cover takes care of the damages made to the third party vehicles.
- Losses to self: Any dent or scratch on your car creates waves of anger and disappointment in you. So, in cases where your car might have faced a serious accident, the damages are more than a dent or a scratch. Money goes in getting the car repaired, personnel charges and getting it back into the previous shape. Having comprehensive four wheeler insurance provides the policy holder with coverage on all such repairs and modifications.
- No Claim Bonus Loss: Four wheeler insurance companies provide the policy holder with a benefit of a bonus for the subsequent year for no claims made in the current year. The bonus is generally a discount on the premiums to be paid in the subsequent year. If the four wheeler insurance policy has expired and is not renewed on time, the policy holder loses all claims to the ‘No-Claim’ bonus.
- Legal Complications: Apart from monetary losses, the legal complications that follow due to driving without valid four wheeler insurance are tremendous. If the accident leads to severe damage to the third party vehicle or property, the severity of legal complications is an add-on to the already existing one due to driving without a valid insurance. The car owner is liable to a challan along with a hefty fine or can even be imprisoned.
Bottom line is, having four wheeler insurance is a must if you own a car. Whether the policy is a third party cover or comprehensive car insurance, a valid four wheeler insurance saves you from all financial losses incurred from an accident and also from legal matters.