In contrast to this, the mandatory third-party car insurance covers the insured’s legal liability for death/disability towards a third-party and/or property damage caused to them.
As comprehensive insurance plan is optional, a lot of people do not buy one. However, if you don’t have one, you won’t be able to get any compensation in case of a car wreck.
Therefore, I always recommend people to buy a comprehensive insurance plan for their car to cover all security aspects.
Let’s have a look at a few scenarios when you should opt for a comprehensive coverage in your motor insurance policy.
When The Loan Term Is Over And You Own The Vehicle
At the time of signing loan papers, banks ask for your consent to protect the vehicle against physical damage via comprehensive coverage.
But once the loan has been repaid, you are no longer obligated to buy a comprehensive cover. However, it’s necessary under law to at least insure your vehicle under third-party cover.
Sample this: You might be the best driver around, but there will be always certain situations that would be beyond your control, as in the case of natural calamities or a drunk driver hitting your car that can wreck your vehicle.
To be prepared for these situations, it is imperative for you to buy and continue with a comprehensive motor insurance cover.
When The Replacement Cost Is Less Than Insured Declared Value (IDV)
Till the replacement cost of your old vehicle is less than its IDV value, you must never drop the comprehensive cover.
In fact, you should never, since a comprehensive coverage provides multiple benefits and secures your vehicle against unforeseen events.
For instance, your old car may be worth Rs 150,000, but if it would cost Rs 100,000 to replace the car it doesn’t make sense to drop a comprehensive cover. In case of an unexpected event, you will be losing out money in such a scenario.
When You Don’t Have Enough Funds To Repair A Car
The rationale behind opting for a comprehensive cover is to provision for unforeseen circumstances that may damage your vehicle.
Imagine a situation wherein your car gets damaged owing to thunderstorm or earthquake. Would you be able to pay upfront, out of your own pocket? If so, then you can do without a comprehensive cover.
Even If Your Vehicle Just Sits In The Garage
If you rarely take your car out for a spin and usually keep it in the garage, then you can avoid buying a comprehensive cover.
However, on those rare occasions when you do take your car out, you cannot rule out chances of someone else damaging your car. Therefore, think again before removing the cover.
When You Are Selling The Car
You may not require a comprehensive motor cover if you are planning to sell your car in the immediate term or in case you rarely take your car out for a spin.
Under such scenario, your mandatory third-party insurance will be enough. Of course, be wary of the fact that you cannot rule out chances of someone else damaging your car on those rare occasions when you do take your car out.
Don’t Give Up On Comprehensive Cover Just Yet!
The importance of having motor insurance cannot be stressed enough. It is not just mandatory by law, but also safeguards your economic interests, especially during natural or man-made catastrophes.
As true as it may be, most of us do not really bother about buying or renewing our motor insurance policy.
In fact, recent IRDA report states that nearly 75% of vehicles on Indian roads are either not insured or their insurance had already lapsed. Quite a disturbing revelation, must say!
Curated from Why should you opt for a comprehensive motor policy