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Is Car Insurance Mandatory for New Cars?

Discover why car insurance for new cars is crucial. It's a mandatory safeguard that offers financial protection and liability coverage in accidents.

By Ground report 14 Aug 2023

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India, a country known for its diverse landscapes and bustling cities, is witnessing a rapid increase in vehicles on its roads. As more people invest in cars for personal and professional reasons, the importance of road safety and financial protection has become paramount. One crucial aspect that every new car owner must consider is car insurance.

In this blog, we will explore the regulations and requirements surrounding car insurance for new cars in India to understand why it is essential and mandatory. We will also talk about how you can purchase find out which plan is best for you and also how to assess a plan from Chola MS car insurance for new cars.

Mandatory Third-Party Liability Insurance

In India, owning car insurance is not just a recommendation; it is a legal requirement. According to the Motor Vehicles Act, of 1988, every motor vehicle, including new cars, must have at least a third-party liability insurance policy before being driven on public roads. Third-party liability insurance covers the vehicle owner's legal liabilities towards third parties for any bodily injury, death, or property damage caused by the insured vehicle in an accident.

The mandatory nature of third-party liability insurance is in place to protect innocent victims and ensure that they receive appropriate compensation in case of accidents involving uninsured vehicles. It also helps reduce the financial burden on the Indian legal system, as victims can claim compensation directly from the insurer.

Comprehensive Car Insurance

While third-party liability insurance is mandatory, new car owners are also strongly advised to opt for comprehensive car insurance. Unlike third-party insurance, comprehensive coverage protects against third-party liabilities and provides coverage for damages to the insured vehicle due to accidents, theft, natural calamities, and more.

Comprehensive car insurance offers a broader range of benefits, making it an attractive option for car owners looking for complete financial protection. It covers expenses related to vehicle repairs, and medical treatments, and even offers personal accident coverage for the policyholder.

Insurance for Personal Injury

In addition to third-party liability and comprehensive coverage, some states in India have made personal injury protection (PIP) mandatory. PIP provides medical coverage for the policyholder and passengers in case of injury resulting from a car accident. It helps cover medical expenses, irrespective of who is at fault in the accident.

Long-Term Insurance Policies

In the past, car owners in India used to renew their insurance policies annually. However, in 2018, the Insurance Regulatory and Development Authority of India (IRDAI) introduced long-term motor insurance policies. New car buyers now can purchase a policy for three years for new cars and five years for two-wheelers. This move aimed to increase compliance and provide long-term financial protection to vehicle owners.

In conclusion, car insurance is indeed mandatory for new cars in India. It fulfills legal requirements and provides essential financial protection to vehicle owners and other road users.

To ensure you understand the subject before you pick the best car insurance for new cars in the market, click here to know more on the Chola MS car insurance website. You will see different types of policies and you can choose as per your requirement and budget. You can also ask for a quote by entering your basic contact information. While third-party liability insurance is the minimum requirement, opting for comprehensive car insurance for new cars offers comprehensive protection against a range of risks.

Owning car insurance for new cars is a legal necessity and a responsible choice for all vehicle owners in India.