EVERYTHING YOU NEED TO KNOW ABOUT DRIVING AN UNINSURED CAR IN INDIA

Is driving an uninsured car Illegal in India?

Driving a car is a tricky task. With increased traffic and congested roads, the risk of accidents rises. Therefore, for the safety and security of the car as well as the driver, buying car insurance has become a must especially in a populated country like India.

Through the provisions of the Indian Motor Vehicles Act, the Ministry of Road Transport and Highways mandates all car owners to insure their vehicle and themselves with insurance. If one is caught driving without a valid insurance policy, a fine gets imposed which may further lead to imprisonment. The first offence is charged up to two thousand Indian rupees generally and a second offence can be four thousand Indian rupees or imprisonment of up to three months.

According to a report by the Insurance Information Bureau, the ratio of uninsured vehicles on Indian roads has gone up by three percentage points from 54% in FY18 to 57% in FY19. Of the over 23 crore vehicles on road in India in 2019 the percentage of uninsured vehicles was at nearly 57%.

 

Third-Party Liability

The Government of India has made it mandatory for all cars to be insured with Third-Party vehicle insurance policy. Third-Party or Liability insurance covers your legal liability leading to death or disability of third-party loss or damages to their car.

Usually, all non-life insurance companies offer Third-Party insurance. However, in certain cases Comprehensive insurance acts as an add-on to the Third-Party cover and protects the insured car from financial losses of damages or theft. Keep in mind, first party is always the insured car. The second party is the insurance provider or company and third party is the individual who raises a claim against damages caused by the first party.

The premium of such third-party car insurance is fixed by the Insurance Regulatory Development and Authority of India IRDAI. It covers damages to third party cars or their property or injuries caused to the third party, generally, in an accident. The policy does not cover the cost of damages to the first party car or for injuries the driver suffered during an accident. Hence, these factors are compelling enough to insure the car.

 

Disadvantages of not having an insurance policy for car

There are numerous disadvantages to driving a car without insurance which include;

Legal difficulties – The legal complications arising out of an accident to a third party can be complicated involving heavy fines and imprisonment. The financial loss due to the accidental death of the person driving an uninsured car or a third party can be extremely dense and a bad life experience also leads to suspension of the driving licence.

 

Loss of No Claim Bonus - In case the car insurance policy has lapsed beyond a certain time period, the No Claim Bonus (NCB) is gone. This will lead to higher premiums especially while renewing the lapsed policy. The longer the time taken to renew the expired policy further it will increase the premium. In cases of lapsed policies, some insurance providers do not offer add-ons like Zero Depreciation cover.

Self-damage - In case of an unfortunate accident, apart from the third party, the car could sustain damages too. While the cost of damages to the third party or their property have to be borne there will also be payment charge for the car and treatment cost of any injuries. Insuring your car with comprehensive car insurance ensures coverage for both third-party as well as own damages.

 

Tips to avoid getting fined for driving a car without insurance

Here are some ways you can avoid getting fine for driving a car without insurance;

• Renew the car insurance ahead of its expiry date
• Ensure you purchase car insurance if you have purchased a second-hand car as well
• Store a hard copy of the car documents such as the Registration Certificate (RC), Pollution Under Control (PUC) certificate and your Driving Licence (DL) in the car itself. Store a soft copy of all these documents on your mobile too
• Buy the insurance policy for your car before you get on the road. A third-party liability policy is mandatory

Remember, the liability involved in road accidents injuring others attract an enormous payment.

 

Ways to find the best car insurance

The online car insurance process is hassle-free and easy for every task like buying or renewing an insurance policy or even raising claims. It is essential to choose the best car insurance plan in the market that is right for your car. Here some tips to choose rightly;

Coverage - Always look for the type of coverage offered. While the Third-Party insurance is cheaper compared to the Comprehensive insurance plan, the latter covers both Third-Party liabilities and own damage. Choose as per your needs analysing the risks involved in not opting for your own damage insurance cover.

Compare plans - Make sure before deciding you compare different insurance plans available. Compare car insurance plans to see what options are there for you to choose the best car insurance policy. You can see the details easily with the online insurance process.

Discounts - Look for discounts that would help make the choice easier and get a policy that best suits your needs whilst is cheaper than the others.

Choose the right Insured Declared Value and Add-ons - A lower insurance premium does not automatically mean higher coverage. The Insured Declared Value (IDV) is the total amount of compensation paid when you raise a claim. It is also known as the market value. Always check for the IDV before investing in an insurance plan.

Even with Add-ons, make sure you choose the one that enhances your basic Comprehensive car insurance policy for instance the No Claim Bonus (NCB) protect.

Check the Claim and Renewal procedure – Remember to check the process of registration, claim and renewal is an easy and hassle-free one. A good car insurance provider will be able to settle claims and ensure smooth renewal procedures without much difficulty.Ideally online car insurance is the fastest and efficient insurance method.

Policy details – It is very important to read the terms and conditions of the insurance policy to understand each and every detail of the contract between the insurance provider and you or the policyholder. Ensure you know what is covered and not in the insurance policy to protect your interests.

 

What is the process if you get caught driving without a car insurance policy?

If any traffic officer catches you for driving a car without an insurance policy you will face these issues;

• You will have to stop your car on the road-side or near the traffic policeman’s booth
• The traffic officer will ask you to show all the relevant documents of the car like your registration certificate and your driving license.
• For driving without a car insurance policy, the traffic officer will immediately issue you a challan or fine. You can either pay this challan offline by visiting the nearest traffic police station in the area or you can pay your fine online as well.

Once this process is followed only then can you drive your car again on the road. Failing to pay, may result in a higher fine the next time you get caught as your data records will show prior pending dues.

 

Being cautious and abiding traffic rules while driving a car on the road is your moral responsibility. It is about saving your as well as others’ life which if you fail to do, you may damage someone else’s property or hurt them. In such cases, it will be your car insurance policy that will offer some help.

 

“Like education, healthcare also needs to be given importance.”

 

FAQs – Frequently asked questions

 

Let’s look at some frequent queries about driving an uninsured car in India;

Q1. How to renew lapsed car insurance?

Renewing an expired car insurance policy includes inspections and assessment by the insurance company. Contact the insurance company online or offline to initiate the process of renewal. Post the complete assessment, the insurance can be renewed accordingly.

Q2. Is the fine for driving an uninsured car the same for all types of vehicles?

Yes, the fine for driving without car insurance in India is the same across all types of vehicles.

Q3. What happens if you meet with an accident but have no insurance and you are at fault?

Third-Party car insurance policy is mandatory as per the Indian law and failure to insure your car will lead to penalty and later imprisonment. Also, when it is your fault, you need to bear the cost of damages and injuries to the third-party car or driver.

Q4. What happens if you meet with an accident but have no insurance when you are not at fault?

Whether you are at fault or not, you need to insure your car with the Third-Party insurance as per the Indian law. Also, the damages to your car or injuries sustained by you or your passengers will have to be borne by you only in case of no insurance.