Consequences of not having Motor Insurance in India


27 Jul 2023

Know about consequent of not having motor vehicle insurance.

The first thing you should do right after you buy your vehicle is getting a motor insurance policy. By doing so, you’d be providing immediate protection for your car and yourself. Plus, by buying a motor insurance policy, you are performing your due diligence as a responsible driver and citizen as you are abiding by the law. In India, as per the Motor Vehicles Act, it is mandatory for every vehicle to have motor insurance.

As a vehicle owner, you can buy three types of car insurance policies, namely third-party liability, own damage cover, and comprehensive car insurance policies. However, only third-party motor insurance is mandatory by law. It is your choice to buy any of the other two kinds of insurance policies.

Why is third-party liability cover mandatory?

The third-party liability cover provides compensation for any damage caused to the third party’s life, vehicle, or property. This is the most basic motor insurance policy, and it aims to instill in drivers a sense of decorum on the road, as well as to condition them to be safe towards themselves and others. In short, this motor insurance is made mandatory by law to keep people grounded and maintain law and order.

What is the consequence of not having motor insurance in India?

As a vehicle owner, you must always carry valid motor insurance with you. This means that you have to make sure that your third-party liability cover is always renewed on time. An expired motor insurance policy is invalid and might have the same consequences as not owning motor insurance at all.

If you have an accident with your car and injure a third party, you can pay for their compensation if you have a valid third-party motor insurance policy. But in the same scenario, if you do not have a motor insurance policy, then a criminal case will be filed against you for negligent driving.

If you are ever caught by the traffic policy without third-party motor insurance, you can face legal penalties like the imprisonment for 3 months. You will also be imposed with heavy fines for breaking the law.

Here are some of the other consequences of not having motor insurance in India

1. Pay for third-party compensation

If you do not own a valid third-party liability cover, then in case of an accident, you will have to pay for the third-party’s compensation from your own pocket. The compensation may include repairing their car, paying for the treatment of their injuries, or compensating the family in case of their demise. You can avoid this by simply buying a third-party car insurance plan.

2. Pay for your own compensation

A third-party car insurance policy is to compensate for the damage caused to someone else, and not you. But if you want to get covered for the damage caused to you or your car, you must either get your own damage cover or a comprehensive car insurance policy. If you don’t have either, then in the case of any damage caused to your car due to an accident, theft, fire, etc., you will have to bear the repair costs all by yourself.

3. Lack of protection

Buying motor insurance has various benefits, and it provides you with protection as well as assistance in many significant situations. If you have comprehensive car insurance, you do not need to buy third-party cover separately as it is included in it. Besides that, you can opt for add-on covers for wider protection, like zero depreciation cover, roadside assistance, personal accident cover, etc.

The law makes it a mandate to only buy third-party liability cover. But if you want extensive protection that caters to your safety, then you should consider buying a comprehensive car insurance policy. Buy a motor insurance policy not only to avoid the legal consequences but also to provide financial security for yourself in case of unprecedented circumstances.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.