Automobiles

Driving Without A Car Insurance? You Are Inviting Penalties

Have you ever wondered why buying car insurance is mandatory in India? If you have plans of buying a car, visiting different showrooms and taking a quote is a common occurrence. When you take a closer look at the quote, you will come across different components and charges. The ex-showroom price, taxes, handling charges, insurance, etc.
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There is a good reason why dealers offer you a car insurance policy. And no, unlike what some people like to believe, it has got nothing to do with the pricing or commission. On the day of delivery, you would want to drive your car home. It is quite obvious. However, for the same to happen, a car insurance is of utmost importance.

The Motor Vehicles Act, 1988 is what governs the rules of driving and riding on Indian roads. While the law has been around for some time now, a recent amendment is what makes things a bit interested. In the year 1988, an amendment to the Act mandated third-party liability policy for all vehicles. This means,  if your vehicle doesn’t have a third-party liability policy, it is not legal to be driven on the road.

As per the law, you need at least a third-party liability policy. Not having valid car insurance can have a lot of repercussions as well. Should any member of the traffic police department catch hold of you while driving without a policy, you are looking at some hefty penalties. Driving without a car insurance policy can lead to any of the following consequences:

  • Might result in the suspension of your driving license.
  • If the traffic police department deems necessary, the vehicle’s registration might also be canceled.
  • And the penalty that you are liable to pay is INR 1000 or imprisonment up to 3 months.

Things can get a lot stricter should a proposed new bill sees the day. If you do not already have a car insurance policy, it is high time to get the same. This is not applicable only for people opting for a new car. If you have an existing car insurance policy and do not renew car insurance, you are indeed inviting penalties.

Types of Car Insurance

Third-party Policy

If you want to get a car insurance for your vehicle, there are two primary options that you have. You can either buy a third-party liability policy or a comprehensive policy. A third-party cover comes in handy when you meet with an accident and there are damages or injuries to others involved in the accident.

In terms of insurance, an insured is the first party, the insurer is the second party and any other individual is the third party. Thus, if there are any damages or injuries to third-party individuals or properties as a result of an accident, the policy kicks in and takes care of the expenses. Due to its lower level of coverage, a third-party policy is usually cheaper than a comprehensive policy. However, it is also the bare minimum one to get you legal clearance.

Comprehensive Car Insurance Policy

As the name suggests, a comprehensive policy offers a lot of additional features than a third-party policy. It consists of the third-party cover and adds majorly own damage component. It means that you can claim for damages to your own vehicle also during an accident. One of the major advantages of opting for a comprehensive policy is the ability to buy riders.

Riders or add-ons are additional features and benefits that you can club with your existing policy to further enhance its capabilities. Tough you will end up paying slightly higher premiums, the coverage that you receive in return more than makes up for it. Here are some of the most commonly sought-after riders.

  • Zero Depreciation: When you claim your policy, insurers usually consider the depreciated value of spares and repairs. This means that you will end up paying the difference in amount. However, when you opt for this cover, the insurers must consider the market value of the same, thereby saving you money.
  • NCB Protection:NCB or no claims bonus is one of the biggest discounts that you can avail when you renew car insurance. For every year that you do not claim your policy, you stand to benefit from discounts ranging from 20% up to 50%. With this rider, you can claim your policy a certain number of times without impacting the NCB.

Driving without a car insurance is not only unsafe and hazardous but also illegal. With a car insurance, you can drive around safely without having to bother about anything else.