Significance of Car Insurance

Are you the owner of a car? If yes, you will surely know the importance of having car insurance. It has been made compulsory that while buying a car from a car showroom, the cost of insurance for the one year has to be paid by the owner of the car. The amount of insurance depends upon the value of the car. It is usually within 4% to 5% of the value of the car.

Well, just the way we have a life insurance cover for our lives, it is very important that we have a vehicle insurance cover for our car. But still there are millions of vehicle owners across the globe, who do not renew their car insurance once it completes one year. We must also remember that many countries do not allow cars to ply on the roads if the insurance has not been renewed.

Each year, the cost of insurance keeps reducing based on the depreciated value of your car. On an average, around 10% is removed every year from the actual value of the car as depreciation value. There are various reasons how a car insurance can help you overcome obstacles. Some of the different types of car insurance are –

Bodily Injury Liability – This insurance will cover the injury occurred to the driver of another vehicle. In case your car meets with an accident and the driver of the other vehicle is severely injured, your insurance company will bear the cost of the hospitalization charges for the injury caused to the driver of the other car. The advantage of this policy is that you will not be sued by the other vehicle owner for causing the accident.
Personal Injury Protection (PIP) Insurance – This is somewhat similar to the Bodily injury Liability insurance cover. Here, in case your car meets with an accident, you along with all the occupants of your car will be covered for medical treatment under this policy. This includes medical expenses, loss of wages etc.
Under Property Damage Liability – This policy will cover the vehicle of the other party in case your car meets with an accident. Here, the other vehicle repair charges will be borne by your insurance company in case you are at fault. Your car will not be covered and you will have to bear the cost of repairs for your car in such a policy.

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