Top 5 Reasons to Buy Car Insurance in Pakistan

The reasons that prompted us to write on this topic are twofold: a recent revelation by the Securities and Exchange Commission of Pakistan (SECP) and the latest news from the Emergency Services Department (ESD).

The SECP has revealed that only 3% of vehicles are insured, despite the requirement for every vehicle to have at least third-party liability insurance in Pakistan. The fact that only 3% have chosen to purchase third-party motor insurance underscores the general populace’s lack of awareness regarding the benefits of car insurance. This blog will exclusively focus on these benefits. Legal obligations aside, acquiring auto insurance is essential in Pakistan.

The ESD recently shared concerning news, stating that almost 1,100 accidents occurred in Punjab in a single day, involving a similar number of individuals. This alarming statistic underscores the increasing frequency of road accidents, once again emphasizing the significance of buying car insurance.

With no further delay, let’s delve into 5 reasons why you should seriously consider purchasing car insurance today:

1. Financial Protection Against Accidents: Accidents can happen at any time, and the resulting damages can be costly to repair. Car insurance offers you a safety net by covering the expenses associated with repairs to your vehicle in the event of an accident. This can be especially crucial in a country like Pakistan, where road accidents are on the rise. The financial burden of repairs can be overwhelming, but with the right insurance coverage, you can navigate such situations without depleting your savings.

2. Third-Party Liability Coverage: In Pakistan, it is mandatory for every vehicle owner to have at least third-party liability insurance. This coverage provides protection against legal liabilities that arise due to bodily injury or property damage to a third party caused by your vehicle. Without this coverage, you could find yourself facing hefty compensation payments, putting your financial stability at risk. By investing in third-party liability coverage, you ensure that you are compliant with the law and shielded from potential legal and financial repercussions.

3. Protection Against Theft and Vandalism: Car theft and vandalism are unfortunate realities that vehicle owners must be prepared for. Having comprehensive car insurance can provide you with coverage against theft, attempted theft, and vandalism. If your vehicle is stolen or damaged due to vandalism, your insurance can help cover the cost of repairs or even provide a replacement. This coverage can be a lifesaver in safeguarding your investment and saving you from unexpected expenses.

4. Peace of Mind During Natural Disasters: Natural disasters like floods, earthquakes, and heavy rains can wreak havoc on your vehicle. Repairing damages caused by such events can be financially draining. However, comprehensive car insurance often includes coverage for natural disasters. This means that even if your car is damaged due to an unforeseen natural event, your insurance can step in to help cover the repair costs, providing you with peace of mind and stability during challenging times.

Suggested blog: What Your Auto Insurance Policy Does And Does Not Cover?

5. Medical Expenses Coverage: Car accidents can result in injuries not only to your vehicle but also to you and your passengers. Medical expenses can add up quickly, especially if the injuries are severe. A good car insurance policy can offer coverage for medical expenses, ensuring that you and your passengers receive the necessary medical treatment without worrying about the financial implications. This coverage can be a lifeline in emergencies, helping you focus on recovery rather than medical bills.

In addition to the lack of information and appreciation for the benefits of purchasing car insurance, the poor rate of car insurance adoption in Pakistan can also be attributed to the lack of enforcement of relevant laws by the Excise and Taxation departments and transport authorities. Some vehicle owners have resorted to purchasing counterfeit insurance policies at lower rates merely to demonstrate compliance with legal requirements.

In 2018, the SECP proposed amendments to the Motor Vehicle Act of 1939, suggesting that traffic and motorway police be granted the authority to seize vehicles and impose fines of up to Rs.100,000 for vehicles lacking valid insurance certificates. Additionally, it was recommended that severe penalties, including imprisonment for up to one year, fines of up to Rs.1 million, or both, be imposed, along with vehicle seizure, for drivers found to possess bogus, fraudulent, or fabricated insurance policies.

Regrettably, these proposals failed to make any headway. Nonetheless, the SECP has reengaged in efforts to enforce auto insurance by proposing revisions to the motor third-party insurance (MTPI) policy. This aims to bolster protection and convenience for policyholders and accident victims. Through broadening the coverage of this insurance policy, the SECP anticipates that the advantages will become evident to all, ultimately leading to an improvement in the rate of auto insurance adoption in Pakistan.

If you haven’t bought car insurance, you can use OLX Motors car insurance portal to find out the names of car insurance companies in Pakistan, their plans and price.