The Need of Auto Insurance in the ASEAN Region

Whenever a person buys or leases a vehicle, they should protect that investment. Insurance protection can be vital in the event of an accident, vehicle theft, vandalism, or natural disaster. Auto insurance companies compensate for auto accidents or other vehicle damage by paying you annual premiums; they also cover all or most costs.

According to Astute Analytica’s report, the ASEAN auto insurance market is forecast to grow at a compound annual growth rate (CAGR) of 6.5% from 2021-2027. The Philippines has the highest CAGR, and Thailand has the largest auto market. In addition, Malaysia is forecast to witness growth for the ASEAN market. 

Auto Insurance

Auto insurance contracts entail the owner paying premiums in exchange for protection from financial losses due to an accident or other damages to the vehicle. Auto insurance can cover:

  • Damage to a vehicle, regardless of who owns it.
  • Property damage or bodily injury caused in an accident.
  • The cost of medical expenses associated with accidents and injuries.

In addition to the minimum state coverage requirements, the owner can choose to include additional coverage options. Except for New Hampshire, every country requires its drivers to have liability insurance coverage for bodily injury and property damage.

Types of Auto Insurance Coverage

In order to cover the auto insurance, one should consider the following optional coverages:

Collision: A collision insurance policy pays for the damage a vehicle sustains when it collides with another automobile or an object, such as a tree or guardrail. However, collision coverage will not cover mechanical failure or normal wear-and-tear on the auto, but it will cover damage from potholes or rolling the vehicle.

Comprehensive: The policy provides coverage for theft and damage caused by activities other than a collision, such as fire, flood, vandalism, hail, falling rocks and trees, and even an asteroid strike.

Glass Coverage: The policy covers damage to windshields, which is a common occurrence. Some insurance policies cover the front, rear, side, and even glass sunroofs without a deductible. The owner can also buy supplemental coverage for glass.

Need of Automotive Insurance

Offers Financial Protection: An individual who causes a vehicle accident may be held responsible for the costs associated with it. Some of these costs may be legal fees, medical costs, and lost wages if the injured person cannot work due to their injuries. Insurance may cover these expenses. In the absence of liability coverage (or adequate liability limits), they would likely have to pay these costs themselves.

Protects from Automobile Repairs Expense: Obtaining comprehensive and collision coverage on the policy may be a good idea if the policyholder owns the vehicle outright. Mandatory liability coverage can help cover damage to another driver’s vehicle, but it is equally important to have coverage on one’s own vehicle. A comprehensive policy may pay for repairs or replacement if the vehicle is stolen, damaged by falling objects or fire, etc.

Protects from the Medical Expense: Medical payments coverage and personal injury protection coverage can help pay if medical expenses arise after an accident. They may also cover any costs incurred by passengers as a result of the accident. These expenses may include hospital visits, doctor bills, and surgery.

Protect the Owner: Despite the fact that liability coverage is a legal requirement, many drivers drive without it. In the event of an accident involving an uninsured driver, uninsured motorist coverage can help pay for your medical bills. In some states, this coverage is mandatory; in others, it is optional.

Fulfilling legal requirements, having adequate auto insurance is crucial from a financial perspective. The right automotive insurance policy may help protect the person’s vehicle, their wallet and even give peace of mind.

Read about What are the Pros and Cons of Buying a Used Car?

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