Car insurance is vital for various reasons. Despite their significance, there are many who drive without a valid policy, putting themselves and others in grave danger. With the seemingly high cost of repairs and liabilities towards third parties, insurance for motor vehicles remains crucial for everyone.
Here are six importance of auto insurance that every vehicle owner should know for better road safety and peaceful driving.
Legal requirement
In many countries, having insurance for cars is a legal requirement. This applies to Malaysia as well, where vehicle insurance is a must in order to renew road tax to legally operate vehicles on public roads. The absence of a valid insurance policy can result in hefty fines, licence suspension, or even legal consequences that can be daunting.
Due to these repercussions, most car owners consider insurance a priority and obey the rule which mandates the financial responsibility of drivers during accidents.
Financial protection
Repairing damaged cars causes significant financial loss for everyone. These damages, either resulting from accidents or acts of nature, can be unbearable. But with insurance, the financial burden of repairing or replacing a vehicle, covering medical expenses, and compensating others for their losses can be eased.
As such, every car policy is designed to make up for the financial loss, be it comprehensive insurance, third-party insurance or third-party, fire and theft coverage.
Liability coverage
If you cause an accident, your insurance covers liability, which pays for the other party’s medical bills, property damage, and other losses. Without insurance, you would be personally liable for these costs, which could be substantial. Failure to cover third-party liabilities can also lead to legal consequences.
However, with insurance, you can have legal defence in case you’re sued after an accident. This can be a significant benefit if you’re involved in a lawsuit.
Personal injury protection
It’s common for auto insurance plans to include personal injury protection (PIP) or medical payment coverage that covers medical expenses in the event of an accident. This includes medical expenses of oneself and third parties, regardless of who is at fault.
Having a motor insurance policy is not only helpful to protect against vehicle damages but also injuries suffered during accidents, which can be severe at times.
Resale value
Believe it or not, having a history of continuous insurance coverage can improve the depreciation rates of cars. Service and maintenance records are one of the factors affecting the resale value of cars; having consistent insurance coverage helps potential buyers identify if the car has been well-maintained and protected.
A lapse in insurance, especially numerous times, suggests that the vehicle has not been well-protected, potentially affecting its market value.
Peace of mind
Cars are susceptible to damage and wear and tear. Because of this, vehicle owners constantly worry about repairs and breakdowns, which can burn a hole in one’s pocket. But with car insurance, owners can have peace of mind.
Knowing that you’re financially protected against accidents and liabilities to others can reduce the stress and anxiety associated with driving. This, in turn, puts you in a more comfortable situation than driving without one.
Bjak is one of Malaysia’s biggest insurance comparison websites, offering policies from over 10 brands. Visit Bjak today to get your free insurance quote!
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