In simple words, vehicle insurance protects you from financial loss in case of an accident. Here it is important to understand that the financial implications of damage through the vehicle can be very high. The damage could be to another person or property or to self or to ones own car. You need to take vehicle insurance to be able to bear the cost of damages in case of an accident.
1. It fulfills the legal requirement It is mandatory by law to have the basic third party insurance on the vehicle to be able to drive it. To save yourself from any legal penalty, you should get the vehicle insured. Besides it is a symbol of being a responsible citizen.
2. It protects you from financial implications in case of damage to third party In case of an accident if you have damaged another property or have injured someone, you might have to pay damages that are beyond your means. It may become a liability for life. If you have insurance, your insurance company will bear the cost of damages to another property or vehicle or medical bills in case of an injury to another person.
3. It covers damages to your own vehicle or injury to self In case someone else hits you or your vehicle, you may have to still bear the cost of repair to your vehicle and the medical bills for your own injuries if the other person is not in a position to pay or is inadequately insured. These costs again could be quite overwhelming. Comprehensive car insurance covers your costs for own injury or vehicle damage.
4. It covers the car against damages during natural disasters or fire You might never meet an accident but a natural disaster like a storm or earthquake may strike and damage your vehicle grossly. Your vehicle may catch fire due to some internal problem or get damaged due to vandalism. Car insurance covers your vehicle against damages due to natural disasters, fire and vandalism.
5. It covers the vehicle in case of theft or total loss Your car might get stolen. It may get totally destroyed or be rendered unusable due to accident or act of nature. This absolute may cause substantial harm to your finances as well. Vehicle insurance covers total loss of vehicle due to theft or accident.
6. Added advantages Insurance companies have tie-ups with garages where you can get cashless claims. Many add-on covers are available like roadside assistance or loss of key cover that can be very useful in emergency situations other than accidents.