Repercussions of Not Having a Motor Insurance in India
Updated On Oct 15, 2023
Car insurance protects you from any unforeseen loss or damages arising out of collisions, third party liability, natural calamities, fire, man made disasters, burglary, vandalism, etc. In compliance with the Indian Motor Vehicle Act, 1988, every car owner in India requires a mandatory third-party liability cover for his/her car to drive on public roads.
Car insurance plans are generally issued for a year after which you must renew the policy. If you do not renew your insurance policy, it implies you are driving your car without valid car insurance. In India, driving on a public road without valid third-party liability insurance is unlawful. Not only does valid car insurance policy help prevent legal issues, but it also protects you and your car from losses due to unforeseen accidents.
Repercussions of Driving Without Valid Car Insurance
All car insurance companies are obligated to pay for any third-party liabilities of the insured car owners. As per Indian law, it is obligatory for any car owner to have car insurance. Not having valid car insurance can lead to facing serious repercussions.
The following are the repercussions of driving your car without valid car insurance.
1. Pay for Third-Party Losses: If you cause an accident unintentionally, you can probably end up damaging a third party's property or injuring someone. The accident could in some situations, cause the death of the third party concerned. You will be legally responsible to pay for the damages caused to third-party (surrounding) property due to the accident. In cases where you have caused bodily injuries to a third-party or death, you must compensate for the loss of life.
2. Pay for Own Damages: You can cause damages not only to third parties but also to your vehicle if you meet with an accident where you are at fault. You must bear third-party liabilities without a car insurance policy and pay for damages caused by your car. This automatically amplifies your losses and can lead to financial distress.
3. Lose No Claim Bonus: If your insurance policy has expired and if you do not renew the policy within 90 days of the expiration of your car insurance policy, you may lose a "No Claim Bonus" that restores to zero. This 'no claim bonus can be used to save on premiums during insurance renewals and can be accrued upon each claim-free policy year.
4. Face Legal Actions: Violating the law can lead to legal problems. You may have to face legal consequences if you are found driving your car without a valid insurance policy. The third-party victim can take you to the court or your car driving license may in certain cases be confiscated or suspended. These situations are not only unpleasant but may attract legal costs and increase your financial losses. Driving a car without a valid third-party car insurance attracts a fine of Rs. 2,000 and/or imprisonment of up to 3 months.
A car insurance policy is legally mandatory and not having one results in serious repercussions, as mentioned above. The choice of buying a car insurance policy is yours. A comprehensive car insurance policy is not compulsory but recommended. However, you do need to buy third-party car insurance separately if you do not have comprehensive car insurance. Offence for driving without insurance can result in paying heavy fines, and repeated offences can dramatically worsen the severity of the punishments.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.