Car insurance is an indispensable requirement when you own a car. It is a mandate of law that exempts no car owner. But your responsibility does not end with the purchase of the car insurance – you must ensure that you carry these papers every time you drive a car in India to avoid any sort of trouble.
Is It Illegal to Drive an Uninsured Car in India?
Unlike most other liability insurances, third-party car insurance is mandatory as per the Motor Vehicles Act, 1988. Driving an uninsured vehicle will attract a fine and 3 months imprisonment. The owner must therefore procure third-party motor insurance at the time of purchase of a new car itself.
Legal Penalties and Fines for Driving an Uninsured Car in India
Section 81 of the amended Motor Vehicles Act, 2019, states that the legal fines and penalties for driving a car without insurance are as follows –
- First Offence a fine of INR 2,000 will be charged.
- Second Offence a fine of INR 4,000 and/or imprisonment of up to 3 months.
Which Insurance Should You Get? Third-party or Comprehensive?
The decision to purchase a third party or comprehensive car insurance solely rests on the car owner. Given below is a table indicating the differences between the two along with pros and cons that will help you make the decision as to which insurance will best suit your needs –
|Basis||Comprehensive Insurance Policy||Third Party Insurance Policy|
|Coverage details||Offers coverage for eventualities such as theft, fire, damage caused to or by third parties, riot damage, arson or vandalism, natural disasters, etc.|
The eventualities covered under the policy are for third-party only –
|Premium price||It is higher than third-party insurance due to higher coverage and benefits.||The premium is one of the lowest amongst the different kinds of car insurance policies. It is determined by the IRDAI.|
|Customisations||There is scope for customisations in the form of add-ons such as Road Assistance, NCB Protect, etc.||There is no scope for customisation.|
|Advantages||Covers both own damages and third-party liabilities. Also, the insured can claim a No Claim Bonus at the end of the term in case there have been no claims made against the policy. The insurance policy will also provide basic legal assistance (including basic investigations and verifications) to the insured.||This policy only covers third-party legal liabilities.|
|Limitations||The policy does not cover wear and tear costs at the time of settlement of claims. Neither does it cover for damages caused due to wear and tear of the car over time. Also, certain vehicle parts and associated damages such as fibre and rubber, are not fully covered by this insurance.||There is a choice involved in the purchases of this policy. It is mandatory. Does not cover for own damages.|
Implications of Driving an Uninsured Car
- Imprisonment for 3 months
- Financial loss due to an accident
- Loss of No Claim Bonus
- Suspension of Driver’s License
Tips to Keep in Mind While Driving a Car
- Renew the insurance on time and do not wait till the last date. Having expired car insurance is equivalent to having no insurance at all and one will have to face all the penalties and fines under law.
- Carry a soft copy of the insurance papers, your Driver’s License (DL), the Registration Certificate (RC), and the Pollution Under Control (PUC) certificate on your email or phone or in the Government of India’s Digi-Locker facility.
- Buy insurance if you buy a used car as a second-hand car is not exempt from this requirement of law.
How to Find the Best Car Insurance Policy?
- Compare, compare, and compare - look at different policies offered by different insurers on neutral websites and peruse their terms and conditions with care. One may even access reviews, the popularity of the policy, premiums, car insurance claim settlement ratio of the car insurance company, etc. to get more clarity about each individual insurance product.
- Look for other discounts – which will depend on the policyholder’s age, profession, city of residence, driving record, etc. These discounts might result in a significant reduction in the premium amounts or might allow for additional add-ons at lower prices, etc.
- Complete the process online – as it reduces the significant amount of time and effort that the insured must put in. Doing so allows for multiple benefits such as last-minute payments and easy, hassle-free transactions. One may even use help and guidance offered by the insurance company while renewing the policy online in case of doubt.
- Opt-in for voluntary deductibles – are those amounts that the insured offers to pay out of his or her own pocket without requesting the insurer to cover the same. Each policy has a pre-decided voluntary deductible limit and increasing the same might help in the reduction of the premium amounts. However, choose this limit wisely.
A motor insurance policy is not just a mandate of law that has to be followed at all costs, but it also serves as a source of solace and financial security when misfortune strikes, which is why it is extremely important that these policies are valid all year round. Ensure that you keep a track of your car insurance cover at all times to secure your own interests.