There is much misinformation and ambiguity surrounding the topic of car insurance, with a lack of clarity about whether car insurance is mandatory or optional.

1. Car Insurance – Mandatory or Optional
What you need to know about Car Insurance:
 Car Insurance in India is Mandatory, not optional
 Accidents are beyond human control – common man has to be protected against accident
risks
 Not everyone could afford the unexpected costs of accident – car insurance provides a
common pool of funds for protection against unexpected and large scale expenses
There is much misinformation and ambiguity surrounding the topic of car insurance, with a lack of
clarity about whether car insurance is mandatory or optional. According to the law, it is mandatory
that there is vehicle insurance for every vehicle on road. However, a typical car owner might ask,
‘Why do I need to pay premiums on vehicle insurance when I might never meet with a road
accident?’
Well, it does sound a valid question, especially if you are among those who drive safe, leave plenty
of space between you and the vehicle in front and break well in time. After all, why would you meet
with an accident when you take up all safety measures, are pretty confident on the roads and
comfortable behind the wheel? And if you do not meet up with a road accident, why would you
need vehicle insurance or a comprehensive insurance?
Before we switch over to the explanatory mode on car insurance, let’s take a shot at the statistics:
Numbers obtained from Motor Transport Statistics of India shows that from an average of one
person killed per every six road accidents in 1991, the ratio increased to one person killed per every
4.5 road accidents in 2006. The National Crime Records Bureau reveals that 13 people die of road
accidents in India every hour! And the World Health Organisation, in its Global Status Report in 2009
on Road Safety, states that more people die in India on roads than in any other country.
The idea is clear. Accidents, by definition, are not by design but they just happen beyond human
control. You may be the best equipped driver on the road, but that doesn’t take the chances of
accidents away.
If that doesn’t convince you about the need for car insurance, consider the case where an innocent
pedestrian’s life is endangered on account of someone’s rash driving. If the vehicle is not covered
with car insurance, if the driver of the vehicle is not well off and cannot afford the expenses of the
injured person, who else would? Even if the driver is taken to court, there would be extensive
judicial processes on finding who is at fault. But still, the question remains: Who would bear the
expenses? Well, think vehicle insurance, think comprehensive insurance.
Now, a look at the other part of the story – what if the driver ended up in an accident that caused
extensive damage to the other person as well as to his own vehicle? Comprehensive insurance
would provide third party coverage as well as cover your own expenses so that you would not have
to worry about burning a massive hole in your pocket; it also protects you from damage to your
vehicle by theft or from natural calamities.

2. Alright, that does give an idea about the importance of comprehensive insurance. But still, the
question remains: Why should car insurance be mandatory, not optional?
Well, not every person who drives a car can give an unconditional guarantee that he or she would
bear the expenses involved in an accident, if and when they landed up in an accident. And there
have been cases where entire families have gone bankrupt for want of comprehensive insurance,
either because of injury to the breadwinner or because the driver had to bear the expenses involved
in large scale accidents since they lacked the protection of car insurance. Further, roads and road
risks are common for everyone involved, and everyone has to share in the common responsibility of
vehicle insurance.
That explains why vehicle insurance is mandatory and not optional – and why you need to check if
you have paid your insurance premium yet.
Have a safe journey!