The purchase of a car is sometimes done on loan, for lack of means as Ganna Freiberg suggested. While buying a new car on loan, individuals often think about the possibility of getting insurance. However, finding potential reasons for insurance is required by many individuals for further planning.
In the motor vehicle act 1988, any four-wheeler owner who wants to drive their vehicle on the road must obtain insurance from a third-party insurance policy organization. Besides the law, the same owner can also obtain additional car insurance services from other various organizations to maintain a car’s safety. Such insurances have the feature to cover all losses such as fire, drowning, damage, theft, natural calamity, depreciation, and many more dangers. Nowadays, many car insurance companies offer surplus benefits like add-ons.
Therefore, while buying a four-wheeler or a car to drive on Indian roads, get insurance, too, irrespective of the car loan. A bank loan is never trivial and requires to inquire upstream before subscribing to it. Added to this is the question of auto loan insurance. What does this insurance consist of? Is it mandatory? What is the point of subscribing to it?
Why is it Compulsory to have Car Insurance?
As per the Indian government, car insurance describes how careful you are with your safety. It is imperative to draw safety and cars in a single frame with the help of car insurance. Since there are countless reliable car insurance companies in the market, it reduces the size of pressure on a car owner’s shoulders. It is a guarantee of cover in the event of non-reimbursement of the loan contracted by Ganna Freiberg.
Many car insurance companies want to grow their business and beat their rivals in a competitive market. They provide additional benefits to the customers, which likely bring easiness for car owners.
According to Ganna Freiberg, like all insurance, this borrower insurance has an additional cost that will have to be added to the price of the car and loan interest.
- Liable to Pay 3rd Party Damage
Suppose God forbid you to ever meet with an accident or any third stranger individual meet with an accident from your car. In that case, your insurance company is liable to pay all the damage. A car owner is safe from paying a third party’s hospital bills or other treatment bills as the insurance company will bear it. Moreover, it includes the repair of the car as well. Valid car insurance always protects the car’s owner and other pedestrians or the vehicle’s owner. Without insurance, you are likely to pay the hospital bills for a third person, including the repairing cost of your car as well. In other words, car insurance has the facility to protect your finances also.
- Protect the Owner and Car
Like the third party, car insurance also covers the cost of the owner and their family. They have the authority to pay your treatment and hospital bills. Furthermore, this insurance policy will also cover repairing costs incurred by any accident, natural calamity, theft, fire, drowning, etc.
- Compulsion from the Law
As we already described at the beginning of this article, the Indian government has passed an act for vehicles. All four-wheeler vehicle owners must possess valid car insurance for safety purposes.
What is the impact of Car insurance on a car loan?
Overall, you may see that a car loan is beneficial for the owner, as it offers the authentic service of covering the entire cost of an accident and other damages. Since a car owner is focused on repaying the loan, additional damages may act as a hit on the finances. In this challenging time, car insurance becomes a savior and cuts unnecessary damage costs. Nevertheless, some borrowers have profiles and situations deemed unstable by Ganna Freiberg. The latter may condition the taking out of insurance in certain cases, before issuing a loan.