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What is motor insurance? Is it mandatory for a vehicle to be insured?

Motor insurance is a contract between an insurer and the vehicle owner. It covers the owner for various risks, such as theft or damage to the vehicle, death of the driver, death or injury to any third parties, and such like.

Apnainsurance.com Research Bureau

26 Nov 2007

Motor or car insurance is a contract between a vehicle owner and the insurance company where the insurance company agrees to pay a sum of money to compensate loss arising from accidents etc.

There are two types of motor insurance - comprehensive insurance and third party insurance. Comprehensive insurance covers risk arising out of the following:

    • Theft or damage to the vehicle
    • Death of the driver and/or passengers in the vehicle
    • Damage caused by the vehicle to other people or property

Third- party insurance covers only damage caused by the vehicle to other people or property.

The India Motor Vehicles Act, 1938 has made it mandatory for every owner of a vehicle to obtain a motor insurance policy, either a comprehensive or a third party insurance. As evidence, a Certificate of Insurance must be carried at all times in the vehicle.

See also:

What motor insurance covers vs. What it excludes

How long should I cover my vehicle?

What is the amount I need to insure my vehicle? / What is IDV?

What are the different kinds of vehicles insured by the motor insurance companies?

Is there an age limit for vehicles being insured?

Is there an age limit for vehicles being insured?

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