With the increasing traffic menace, a lot of people are against the idea of buying cars on their own. It is in such times that taxi business thrives. Once you get the hang of it, you can even create your own fleet and offer employment to others.
Apart from the most obvious way of handling your own taxi business, you can also rent them out to third parties or even lease them out. Regardless of which way you choose, having comprehensive insurance for your car is of utmost importance.
The Motor Vehicles Act of 1988 makes it mandatory for all vehicles to have valid insurance on them so that they can be driven legally on the public roads.
Keeping that in mind, there are different types of insurance that you can choose from. Depending on your needs and budget, you can pick one from the available types of insurance for cars.
Third Party Car Insurance
A third party car insurance is the minimum regulatory requirement that every car owner must meet. They usually are for damages caused by your car to other individuals or properties. Thus, the following two components.
- Property Damage: If your car meets with an accident and it results in the damage of property of other individuals, the policy will compensate for the same.
- Injuries: Similarly, if your car meets with an accident causing damages to other individuals, the policy will compensate for it.
As the name suggests, comprehensive insurance offers a lot more coverage and value for your money. Apart from the mandatory third party liability cover, it also offers own damage coverage and covers against natural and man-made calamities. All this ensures that your vehicle is safe during landslides, floods, earthquakes etc. as well as theft, vandalism, burglary etc.
5 Major Risks of Not Buying Car Insurance
If you drive your car around without either of the types of insurance available, there are a lot of risks that you are potentially open to. Here are a few of them:
#1. Hefty Fines
When traffic police catch hold of you driving without valid car insurance, be ready to shell out a hefty fine. As per the recent Road Transport and Safety Bill 2014, one would end up paying INR 25,000 for light vehicles and INR 75,000 for heavy vehicles if found driving without a valid policy.
#2. Legal Complications
In the event of an accident involving other vehicles, individuals or properties, be ready to face legal consequences. You not only will have to pay for the damages from your own pockets but there is also a chance of fines and imprisonment in extreme cases.
#3. Other Benefits
Buying or renewing car insurance policies on a regular basis have a lot of benefits. If you do not buy or renew them on time or ever, you run into the risk of not benefiting from them. An NCB is one such prominent example.
#4. Own Damage
The lack of a comprehensive policy means damages to your own vehicle is not covered. In such cases, if you meet with an accident, any damages to your car will also have to be borne by you. This can feel like adding salt to the wounds. Thus, having car insurance is essential.
#5. Medical Payments
In the event of an accident, if the driver of the vehicle, as well as the passengers, are injured, a comprehensive plan can take care of all the medical expenses arising out of it.
However, driving around without a policy would mean that you have to pay for all medical expenses from your pockets. Given the current medical expenses, it can easily burn a deep hole in your pocket.
The Bottom Line
No matter whether you are planning to buy a car for personal use or for taxi purposes, having a third party car insurance at the minimum is important. A comprehensive policy is recommended for the additional cover it offers.