Top Reasons Why You Should Buy a Car Insurance Policy Before Hitting the Road

 Driving your car gives you freedom, comfort, and convenience — but with that comes responsibility. Whether you own a brand-new vehicle or a used one, having a car insurance policy is not just a smart choice — it’s a legal necessity in India. Many car owners overlook the importance of car insurance until an unexpected incident happens, which can lead to heavy financial losses.

In this blog, we’ll explain why buying a car insurance policy before hitting the road is crucial, its benefits, and how it safeguards both you and your vehicle from unexpected risks.


Understanding Car Insurance

Car insurance (also known as motor insurance) is a contract between you and the insurance company that protects you against financial losses in case your car is damaged, stolen, or involved in an accident.

In India, car insurance is regulated by the Insurance Regulatory and Development Authority of India (IRDAI) and is mandatory under the Motor Vehicles Act, 1988, for every vehicle owner to have at least Third-Party Liability coverage.

Types of Car Insurance Policies

Before understanding why you should buy one, let’s quickly recap the types of car insurance policies available in India:

1. Third-Party Liability Insurance

This is mandatory by law and covers:

  • Injury or death of a third person caused by your car.
  • Damage to another person’s property or vehicle.

However, it does not cover damage to your own vehicle.

2. Comprehensive Car Insurance

A comprehensive policy covers both third-party liabilities and damage to your own car due to:

  • Accidents or collisions
  • Fire or explosion
  • Theft or burglary
  • Natural disasters (floods, cyclones, etc.)
  • Man-made events (riots, vandalism, etc.)

You can also enhance coverage by adding optional add-on covers like Zero Depreciation, Roadside Assistance, and Engine Protection.

Top Reasons to Buy a Car Insurance Policy Before Hitting the Road

Here are the key reasons why you should never drive your car without insurance:

1. It’s Legally Mandatory

According to the Motor Vehicles Act, 1988, it is compulsory for every car owner in India to have at least Third-Party Liability Insurance before driving on public roads.

Driving without valid insurance can lead to:

  • A fine of ₹2,000 (for first offence)
  • Imprisonment up to 3 months (for repeated offence)
  • Seizure of your vehicle

So, before you start your engine, make sure your insurance papers are valid and updated.

2. Financial Protection Against Accidents

Accidents can happen anytime, even to the safest drivers. Car repairs today can be expensive, and a single collision could cost thousands of rupees.

A comprehensive car insurance policy ensures you don’t have to bear these repair costs out of pocket. Your insurer will cover the expenses, giving you financial stability and peace of mind.

3. Covers Third-Party Liabilities

If your car accidentally causes injury, death, or property damage to a third party, you are legally responsible for those damages. A third-party insurance policy covers these liabilities, protecting you from heavy financial and legal consequences.

4. Protection Against Theft or Total Loss

Car theft is a growing concern, especially in metro cities. In case your car is stolen and not recovered, your insurance company compensates you for the Insured Declared Value (IDV) — the current market value of your car.

Similarly, if your vehicle is completely damaged (beyond repair), you receive a total loss claim amount as per your policy.

5. Coverage for Natural and Man-Made Disasters

India frequently experiences natural disasters like floods, cyclones, and earthquakes. These can cause severe damage to vehicles parked outside or in low-lying areas.

A comprehensive car insurance policy covers losses arising from such natural events, as well as man-made ones like riots or vandalism.

6. Personal Accident (PA) Cover

Every car insurance policy includes a Personal Accident Cover for the owner-driver, providing financial support in case of injury, disability, or death due to an accident. The cover amount is generally up to ₹15 lakh, ensuring financial security for your family.

7. Cashless Repairs at Network Garages

Most leading insurance companies in India have tie-ups with cashless garages, allowing you to get your car repaired without paying up front. The insurer settles the repair cost directly with the garage — you only pay the deductible amount (if any).

8. No Claim Bonus (NCB) Rewards

If you do not make any claim during your policy term, you are rewarded with a No Claim Bonus (NCB) at the time of renewal.

This can give you a discount of up to 50% on your renewal premium — a great incentive for safe and responsible driving.

9. Peace of Mind on Every Drive

Knowing that your car, finances, and legal obligations are covered gives you the confidence to drive peacefully. Whether it’s a short city commute or a long highway trip, you can focus on the road instead of worrying about potential expenses.

10. Easy Online Purchase and Renewal

In 2025, buying or renewing car insurance will be completely online. You can compare plans, customize coverage, calculate premiums, and get your policy instantly — all within minutes.

Digital platforms like SquareInsurance.in make the process hassle-free, transparent, and cost-effective.

Key Add-Ons You Should Consider

Enhance your coverage with these useful add-ons:

  • Zero Depreciation Cover: Get a full claim without depreciation deduction.
  • Engine Protection Cover: Covers engine damage due to waterlogging or oil leakage.
  • Roadside Assistance Cover: Helps during breakdowns, towing, or emergencies.
  • NCB Protection Cover: Retains your bonus even after one claim.
  • Return to Invoice Cover: Get the full invoice value in case of total loss or theft.

These add-ons provide extra financial safety, especially for new or high-value cars.

Tips for Choosing the Right Car Insurance Policy

  1. Compare Multiple Insurers: Use online comparison tools to find the best plan at the right price.
  2. Check Claim Settlement Ratio (CSR): Prefer insurers with a CSR above 90% for reliable claim service.
  3. Review Inclusions and Exclusions: Read policy terms carefully before buying.
  4. Set the Right IDV (Insured Declared Value): Don’t under-insure to save premium.
  5. Look for Cashless Network Garages: Ensure wide network coverage near your location.

Conclusion

Buying a car insurance policy before hitting the road is not just about complying with the law — it’s about protecting yourself, your car, and others on the road. Whether it’s a minor dent or a major accident, insurance ensures you’re never financially stranded.

With online platforms like SquareInsurance.in, you can compare, buy, and renew your car insurance instantly — ensuring complete protection before your next drive.

Frequently Asked Questions (FAQs)

Q.1. Why is car insurance mandatory in India?

Under the Motor Vehicles Act, 1988, every vehicle owner in India must have at least a Third-Party Liability Insurance policy. It protects you financially if your vehicle causes injury, death, or property damage to another person.

Q.2. What are the types of car insurance policies?

There are mainly two types of car insurance policies:

  • Third-Party Insurance: Covers third-party injury or property damage.
  • Comprehensive Insurance: Covers third-party liabilities, own damage, theft, fire, and natural disasters.

Q.3. What is the meaning of IDV in car insurance?

IDV (Insured Declared Value) is the current market value of your car, which determines the maximum compensation you’ll receive in case of theft or total loss.

Q.4. What is NCB in car insurance?

NCB (No Claim Bonus) is a discount offered on your renewal premium if you haven’t made any claim during the previous policy year. The discount can go up to 50% after consecutive claim-free years.

Q.5. What documents are needed to buy car insurance?

You generally need:

  • Vehicle Registration Certificate (RC)
  • Driving Licence (DL)
  • Previous insurance details (if applicable)
  • Personal details such as address, contact number, and ID proof

 

Comments

Post a Comment

Popular posts from this blog

POSP Code Check Online – A Simple Guide for Insurance Agents

Image
If you are working as a Point of Sales Person (POSP) in the insurance industry, you might have heard about a POSP code. It is a unique identification number that is assigned to every POSP agent once they are registered with an insurance company or an intermediary. This code helps an insurance agent track sales, commissions, and overall performance. In this blog, we will explain everything you need to know about  POSP code check online —why it's important, how to check it, and what to do if you face any issues. Whether you are a new insurance agent or someone who has been in the field for a while, this guide will be useful for you. If you're planning to join, understanding the  insurance POSP apply  process is the first step toward starting your journey. What Is a POSP Code? A  POSP (Point of Sales Person) code  is a unique ID provided to individuals who are authorized to sell insurance products under the POSP model. This model was introduced by IRDAI (Insurance ...
Read more

Steps to Get IRDAI Certification to Become an Insurance Agent

Image
 If you have ever thought about starting a career in insurance, becoming an insurance agent can be a rewarding choice. Not only can you help people secure their financial future, but you can also enjoy a flexible work schedule and the potential for good earnings. One of the first steps to get started is to obtain certification from the Insurance Regulatory and Development Authority of India (IRDAI). Here’s a simple guide on how to get your IRDAI certification and become an insurance agent . Follow these steps: Step 1: Understand the Role of an Insurance Agent Before you join, it’s important to know what an insurance agent does. Insurance agents help clients choose insurance policies that fit their needs. They explain different types of insurance, such as life, health, and auto insurance. By understanding the basics, you’ll be better prepared for the next steps.   Step 2: Meet the Eligibility Criteria To become an insurance agent, you need to meet certain eligibil...
Read more

Top 10 Best Helmet Brands in India [2025] – Safety Meets Style

Image
Introduction Whether you're a daily commuter, a weekend rider, or a delivery executive, wearing a helmet is non-negotiable . In India, where road conditions can be unpredictable, a helmet is not just a legal requirement—it’s a lifesaving essential . But with so many brands available, how do you choose the right one? We’ve compiled a list of the Top 10 Best Helmet Brands in India [2025] that blend safety, style, and affordability , so you can ride confidently and responsibly. 1. Studds One of the most trusted best helmet brands in India, Studds is known for its durable build quality and affordable pricing . With ISI, DOT, and ECE certifications on many of their models, Studds helmets offer great value for money. Price Range: ₹900 – ₹3,500 Best For: Budget buyers, commuters 2. Steelbird Steelbird is a market leader in terms of variety and innovation. Their Air and SBA series are popular for comfort and design, and they also offer helmets with Bluetooth integratio...
Read more