What Happens When You Dont Buy Motor Insurance


31 Jul 2023

Kotak General Insurance offers you various car insurance products to protect yourself & your car from the burden of financial loss & damages. Get a Car Insurance!

Apart from abiding by and keeping up with the traffic laws, another crucial law that you need to follow is the need to protect your car with a motor insurance policy.

To maintain decorum on the roads and to ensure the safety of car owners as well as pedestrians, the government in India has made it mandatory for every vehicle owner to buy third-party insurance. There are two types of car insurance that you can invest in: third-party and comprehensive car insurance. The former has been made compulsory by law under the Motor Vehicles Act, 1988.

Even though comprehensive car insurance is not mandatory under the law, it is best to buy one because it covers the policyholder against own damage as well as third-party liabilities. Choosing to buy this type of insurance policy is a matter of personal preference. But if you do not buy a third-party motor insurance policy, then there will be consequences that you have to face.

In any case, if the law finds out that you do not own updated third-party car insurance, you could get yourself and your car into serious trouble. Here are the possible consequences you will have to face if you do not own a valid motor vehicle insurance policy.

1. Fines

Under the old provision, in the absence of a valid car insurance policy, you had to pay a fine ofRs.1000. But according to the amended provision under the Motor Vehicles Act, you are liable to pay a fine ofRs.2000. However, this amount is for first-time offenders only. If you are caught with invalid or no third-party car insurance, you are liable to a fine ofRs.4000. Moving further, if you still do not buy a car insurance policy after being caught twice, you will have to pay even higher fines or face severe consequences.

2. Penalties

As a car owner, you have to ensure that you keep all your documents updated and handy. If you do not have a motor insurance policy, you may not only have to pay fines but there are also chances that you may lose your driving license. Besides that, not abiding by this Motor Vehicle Act can also lead to the suspension of your vehicle’s registration.

3. Imprisonment

Yes, it is possible that you could be imprisoned if you do not own at least a third-party car insurance policy. According to the new Motor Vehicle Act released in 2019, you can face imprisonment for up to 3 months. This punishment can be enforced along with the other fines and penalties.

4. Pay yourself for third-party damages

A third-party car insurance policy is responsible for protecting you against the damage caused by your vehicle to someone else. If you face an accident with another car and cause damage to the third-party’s life or car, you are entitled to pay for it from your own pocket if you do not own a motor insurance policy. But if you do have insurance, then you can rely on your insurer to compensate for the damage.

5. Pay yourself for your own damages

A comprehensive car insurance policy protects you and your car against many possible damages. It also covered third-party damages. But if you do not own one, you will have to pay for the damage yourself. And that can cost you more than the premium amount of your insurance policy. If you do not own a comprehensive car insurance policy, you also lose the benefits of many add-on covers that provide better protection for your car.

6. Loss of financial backup

Accidents can be mild or severe. Some might just leave a scratch, while others can cause complete damage to your car or loss of life. In such a case, a car insurance policy is helpful as it can provide financial backing for you as well as your family. If your car is beyond repair, you still have a chance to be reimbursed for it if you have a valid car insurance policy.

In today’s day and age, you can buy motor insurance online, which makes the entire process seamless. You do not want to end up facing legal or financial losses just to save some money on a premium amount. To be a wise, law-abiding citizen and to protect your car, you must always buy car insurance and get it renewed each year.

Kotak General Insurance offers you various car insurance products and services to protect yourself and your car from the burden of financial loss and damages and fulfil all your car insurance needs.

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.