Did you know, driving without car insurance is a punishable offense under traffic laws! Details of Car Insurance, Car Insurance Policy System, So after buying a car it is mandatory to insure every car. Car insurance provides compensation to the vehicle or the owner of the vehicle, or even to a third party, if it is damaged by the vehicle.
So every car owner needs to get car insurance after buying a car. Now let’s know some important aspects of car insurance or motor insurance.
What is car insurance?
Motor insurance is the financial assistance provided to the owner of the vehicle/third party in case of any damage to the vehicle or damage to the third party by the vehicle as per the Insurance Company Act. Third party or third party motor insurance is a statutory requirement for all car owners. Because, if the use of a car in a public place causes damage to a third party, then the owner of the car is responsible for that. So driving without motor insurance in public places is a legally punishable offence.
Types of Car Insurance Policy
Two types of motor insurance policies are generally covered in Bangladesh
- First party or comprehensive insurance policy
- Third party insurance policy.
Comprehensive Insurance
In a first party or comprehensive insurance policy, the insurance company indemnifies the car owner. Under this policy, if a car is involved in an accident, then the insurance companies pay compensation for any damage to the car or the owner of the car arising out of the accident. Besides, if the vehicle is damaged due to any natural calamity, but the vehicle is damaged under the first party, the vehicle owner is compensated for the damage to the vehicle. The premium rates of these policies are usually higher than others.
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Third party insurance policy
If a car is only covered under third party insurance policy, then if the car is damaged due to any reason or accident then no compensation is given to the car owner for the damage to the car. The insurance company will take responsibility for the damage caused to any third party by the vehicle.
What does a car insurance policy cover?
Insurance companies cover car compensation in case of following accidents.
- Fire, lightning, explosion
- Theft/robbery
- No riots
- Earthquake
- Storm, tide, flood, hail inundation
- Terrorist activities
- Hateful activity
- Accidents while traveling by rail, road, inland waterway, lift or elevator
- landslide
Now let’s see what motor insurance does not cover
- illegal act
- Any harm due to intoxicants
- Accidents outside geographical boundaries
- Not having a valid driving license
- Any electrical or mechanical breakdown.
Things you should keep in mind before buying a new motor vehicle
Penalty for injury or death
Before buying a motor insurance policy, make sure that the insurance company will cover the liability for death or injury caused by your vehicle.
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Medical expenses
Check whether the insurance company is providing any compensation if someone outside your car is injured in a road accident in the accident.
Property compensation
If your car causes any damage to someone else’s life or property in an accident, find out whether the insurance company pays for it before insuring it.
Non-accidental damage
Make sure that the insurance company is providing the insurance policy in case of any damage to the car due to various reasons other than road accident such as car theft, car vandalism, fire, storm flood or natural calamity.
After buying a car, motor insurance is very important to avoid damage to the car owner, passengers, and car accidents. So after buying a car ensure the protection of yourself and the car by getting car insurance.
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