It will not be wrong to assume that being without car insurance is losing one’s peace of mind. The owner needs to pay for any damage caused to or because of his/her car before understanding the consequences of not having car insurance.
The logic behind making car insurance compulsory is the fair compensation of any third parties affected by your vehicle. If you don’t have car insurance, you will have to pay the compensation from your pocket. The amount of compensation is calculated basis the financial status and age of the affected third party. So, if your car hits a rich guy, and you do not have car insurance, you will have to pay an unimaginable price as compensation for repairs and well for the treatment of his injuries!
A Comprehensive Car insurance policy ensures that you are covered against the theft of your car. This means your insurer will pay the Insured Declared Value (IDV), i.e., an approximate market value of your car if it is stolen. With no insurance policy in force, you would bear a loss of the entire value of your car.
Apart from theft coverage, a Comprehensive Car Insurance Policy also offers a cover against natural or artificial calamities. Thus, your car is financially covered against earthquakes, floods, riots, vandalism, landslides, etc. If you face any of these without a car insurance policy, you cannot raise a compensation claim.
Any car insurance policy compensates the policyholder for personal injuries suffered while driving the insured car. This is a helpful cover in accidents and emergencies where the owner himself/herself is injured. Without a cover, one needs to go through the hassle of paying the hospitalization charges.
With a Comprehensive Car Insurance Policy, your insurer will pay for the cost of repairing the insured car in case it is damaged. Without the policy, you need to pay this cost no matter how high it is.
As mentioned earlier, there could be many situations in which one needs to cancel a car insurance policy. However, it is important to buy a new car insurance policy as soon as you cancel the old one. Also, check with your insurer if you can get a refund for your existing policy and continue to avail of the No Claim Bonus with the new car insurance policy. Remember that insurance ensures minimum financial losses.