All You Need to Know About Driving an Uninsured Car in India

The Motor Vehicle Act of 1988 has made it mandatory for every vehicle owner in India to have a valid third-party car insurance policy. At the time of purchase of your new car, the manufacturer offers mandatory insurance for four-wheelers that is valid for a year. Once this coverage expires, the car owner is expected to renew the coverage as soon as possible. If the car insurance policy is not renewed in time, the coverage lapses, and since driving an uninsured car is illegal, the vehicle owner can be heavily penalised or even imprisoned for three months.

Considering the serious repercussions of driving an uninsured vehicle, every car owner must at least have the mandatory third-party insurance for 4-wheeler. This way, the policyholder is secured against serious damages as well as the legal consequences that can arise otherwise.

As mentioned earlier, third-party insurance is mandatory for driving on Indian roads. With third-party coverage, the policyholder is secured against any third-party liability arising from a road accident. Under this cover, the insured member is protected from bearing the financial loss for compensating any damages to the third-party person or property.

However, third-party insurance does not compensate for any damages to the insured vehicle. All these have to be borne by the car owner from their pocket, which can significantly dent their savings. To prevent this from happening, car owners are advised to secure their vehicles and themselves with comprehensive insurance for 4-wheeler. A comprehensive cover compensates for damages to the third party and your own vehicle.

Regardless of the kind of coverage chosen by the vehicle owner, it is essential to promptly renew the policy before it lapses to prevent bearing the burden of legal consequences.

Driving an uninsured car compromises the safety of the driver as well as the vehicle. Therefore, the onus of renewing the insurance for a four-wheeler before it lapses is on the car owner.

With a comprehensive car insurance policy, the insurance holder receives financial assistance in distressing scenarios such as theft of the car, accidental damages, and damages to a third party person or property. These costs can become too heavy to bear without being adequately secured with insurance.

Here are the repercussions of driving a car without valid insurance coverage:

Incurring Penalties and Heavy Fines

Since it is illegal in India to drive without a valid car insurance policy, the driver/owner will be subjected to heavy fines and penalties for neglecting the rule. The Motor Vehicle Act 2019 states that an individual will have to pay a fine for driving an uninsured car, or they will find themselves behind bars. The rules laid out for driving an uninsured car are straightforward:

An individual driving without valid insurance will be fined ₹2,000 for the first time.

If an individual is caught driving without valid insurance for the second time, they are expected to pay a fine of ₹4,000 and/or face imprisonment of up to three months.

The legal consequences are stringent because they are designed to discourage drivers from driving without active and valid insurance coverage.

You Have to Compensate for Third-Party Liability

Being involved in a car accident without insurance can be highly stressful. This is because an uninsured vehicle accident means that all the third-party liabilities have to be borne from the pocket of the vehicle owner.

If the uninsured vehicle accident causes the death of the third party, the losses can become significantly high to bear. Conversely, if the vehicle has been protected with a valid third-party cover, not only is the individual secured from legal formalities, but he also gets assistance in compensating for the liabilities.

Bear Expenses for Own Damages

Accidental damages are not always limited to the third party. In most instances, your vehicle also suffers some damage. If your car insurance policy is active and you end up in an accident, you can receive the much-needed financial aid to take care of the damages to your vehicle. This is possible with comprehensive car insurance that secures your car against a host of unpleasant scenarios in addition to an accident such as theft, fire, natural calamities, man-made disasters, etc. Moreover, contrary to popular belief, comprehensive car insurance is not expensive. To check how much the premium would be payable, you can use the free car insurance calculator by Tata AIG. This can help you look for cost-effective coverage that offers well-rounded protection for your car and yourself.

Face Legal Proceedings

Being involved in a car accident without insurance also means that you might have to face legal proceedings. To illustrate with an example, if an uninsured car causes third-party loss, the latter may file a legal complaint against the offender. These legal proceedings would mean that the individual will have to incur legal expenses and may also face serious punishment such as imprisonment. These legal complications only multiply if the third party passes away due to the accident. The punishment could also mean suspension of your driving licence. To avoid all these unpleasant and distressing situations, it is best to ensure that your car insurance is up to date.

You May Lose No-Claim Bonus

Insurance companies reward policyholders with a discount on their premiums when the latter does not raise a single claim during the policy tenure. This discount, termed the no-claim bonus (NCB), grows each year when a claim is not raised and is awarded every time the policy is renewed. The discount on premiums can go as high as 50% if no claim has been raised for five consecutive years. Now, if the car insurance policy has lapsed and has not been renewed in time, the individual loses their cumulative NCB. This also means that they would have to pay a comparatively higher premium at the time of policy renewal.

It is illegal to drive on Indian roads without valid insurance for your four-wheeler. Aside from inviting legal complications, driving an uninsured vehicle can also lead to significant financial concerns if things go wrong. Therefore, every driver is advised to ensure that their car insurance is updated to avoid facing the dire consequences of not abiding by the traffic rules.