Fine for Driving Without Insurance in India

Feb 27, 2024

The Indian Motor Vehicle Act mandates all vehicle owners to insure their car or bike with vehicle insurance. If you are caught driving without a valid insurance policy, you will be imposed with fines and/or imprisonment. To know why it is illegal to drive an uninsured vehicle, read on to find out more about the fine for driving without insurance, types of motor insurance policies, legal complications, and how to find the best vehicle insurance for uninsured vehicles.

Contents

• Is it illegal to drive an uninsured vehicle?
  • Driving a car/bike without insurance
  • Is driving uninsured vehicles illegal or a crime in India?
• Penalty for driving without a car and bike insurance in India
  • 1. Penalties and legal fines for driving without insurance
  • 2. Third-party liability
  • 3. Legal complications
  • 4. Loss of No Claim Bonus
  • 5. Damage to self
• Driving without insurance: Traffic fine in different states in India (2022)
• Tips to avoid getting fined for driving a vehicle without insurance
• How to find the best vehicle insurance?
• Financial implications of driving a car without insurance
  • 1. Non-compliance penalty
  • 2. Paying third parties
  • 3. Repairing own damage
  • 5. Rise in premium
• Motor Insurance Benefits: Why Buy A Comprehensive Car Insurance Policy?
  • 1. Minimise financial implications
  • 2. Better services
  • 3. Peace of mind
• Key Takeaways
• FAQs about uninsured vehicles

Is it illegal to drive an uninsured vehicle?

It might be your budget or sheer procrastination that prompts you to drive an uninsured vehicle. Nobody wants to leave their home planning to get involved in an accident. It happens and comes unannounced. Be it repairs or replacement of parts to your vehicle or the medical treatment cost or legal consequences of an unfortunate accident, paying from your pocket can dent your savings.

Driving a car/bike without insurance

It is illegal to drive a car or a bike without insurance in India. The Motor Vehicles Act, 2019 mandates the vehicle owner to insure their car or bike with an insurance policy. Driving a car without insurance will not only invite fines and/or imprisonment, but it will also dent your finances due to the costs involved in case of an unfortunate accident.

Is driving uninsured vehicles illegal or a crime in India?

Through the provisions of the Motor Vehicles Act, 1988, the Ministry of Road Transport and Highways has notified that it is illegal and a crime to drive an uninsured vehicle. Violation of this rule will attract fines and/or imprisonment of up to 3 months.

Penalty for driving without a car and bike insurance in India

The penalty for riding a bike or driving a car without insurance in India is intended to ensure all vehicles are insured at all times. As per the below table, if you are caught driving a vehicle without insurance for the first time, the fine is Rs. 2,000. If you are caught again or the second time, then the fine for driving without insurance is Rs. 4,000 and/or imprisonment.

Here are the consequences of driving an uninsured car or bike in India.

1. Penalties and legal fines for driving without insurance

Under Section 81 of The Motor Vehicles Act, 2019, below is the penalty and fine for driving without an insurance policy.

2. Third-party liability

Through The Motor Vehicles Act, 1988, the Government of India has made it mandatory for all vehicles to be insured with a Third-party vehicle insurance policy. Third-party Liability insurance covers your legal liability arising to death/disability of third party loss or damages to their property.

All non-life insurance companies have an obligation to offer Third-party insurance. However, Comprehensive insurance acts as an add-on to the third-party cover and protects the insured vehicle from financial losses arising out of damages or theft. To better understand Third-party vehicle insurance, below are some important details.

First Party: The Insured Vehicle.

Second Party: The Insurance Company

Third-Party: The individual who raises a claim against damages caused by the first party.

The third-party vehicle insurance premium is fixed by the Insurance Regulatory Development and Authority of India (IRDAI). It covers damages to third party vehicles or their property or injuries caused to the third party in an accident. The policy does not cover the cost of damages to your vehicle or for injuries you suffer during an accident. Hence, these factors are compelling enough to insure your vehicle.

3. Legal complications

The penalties or the fines if you are caught driving an uninsured vehicle are steep and could invite imprisonment of up to 3 months, the legal complications arising out of an accident to a third party can be complicated and unnecessary. The financial loss due to the accidental death of the person driving an uninsured vehicle or a third party can be extremely complicated and a bad experience. Also, it can lead to suspension of your driving licence.

4. Loss of No Claim Bonus

In case your motor insurance policy has lapsed beyond a certain time frame, you may lose out on the No Claim Bonus (NCB). This will lead to a higher premium while renewing the lapsed policy. The longer the time you renew the expired policy will further increase the premium. Some insurance providers might not offer Add-ons such as Nil or Zero Depreciation cover.

5. Damage to self

In case of an unfortunate accident, apart from the third party, your vehicle could sustain damages as well. While you have to bear the cost of damages to the third party or their property, you will have to pay for damages to your vehicle and the treatment cost of any injuries. Insuring your vehicle with Comprehensive vehicle insurance ensures coverage for both third-party and own damages.

Driving without insurance: Traffic fine in different states in India (2022)

The traffic penalty for driving/riding a vehicle without insurance was Rs. 1,000; however, this was revised through The Motor Vehicles (Amendment) Act, 2019. 

A number of states offered some respite to vehicle users by slashing the fine for driving an uninsured vehicle. Here are the details as of July 2022.

Tips to avoid getting fined for driving a vehicle without insurance

Here are some tips to avoid getting fined for driving an uninsured car or bike:

• Renew the vehicle insurance ahead of its expiry date.

• Ensure you buy vehicle insurance if you have purchased a used or a second-hand vehicle.

• Store a hard copy of the vehicle documents such as the Registration Certificate (RC), Pollution Under Control (PUC) certificate and your Driving Licence (DL).

• Store the soft copy of your vehicle insurance, RC, DL and PUC certificate.

Also, read: Parked Car Accident

How to find the best vehicle insurance?

Online vehicle insurance has made the process of buying/renewing/raising claims hassle-free and easy. However, it’s imperative that you choose the best vehicle insurance in the market. Here are some tips to choose the right insurance for your vehicle:

• Type of coverage: While the Third-Party insurance is cheaper compared to the Comprehensive insurance plan, the latter covers both Third-Party liabilities and Own Damage. Choose the right insurance as per your needs by analysing the risks involved in not opting for the Own Damage Insurance cover.

• Compare different insurance plans: Compare vehicle insurance online to see what options are there for you to choose the best car or bike insurance policy.

• Avail discounts: Ensure you avail of discounts or deals offered by insurers as this will reduce the insurance premium to a certain extent.

• Choose the right insured declared value (IDV): A lower insurance premium does not necessarily mean higher coverage. The Insured Declared Value (IDV) is the total amount of compensation paid when you raise a claim during the policy period. This is also known as the market value of the vehicle.

• Choose the right add-ons: Add-ons act as an enhancement to your basic Comprehensive vehicle insurance policy. Riders or Add-ons such as NCB Protect will protect your No Claim Bonus (NCB) despite raising claims during the period.

• Check the claim procedure: The process while registering or settling a claim should be a hassle-free experience. A good vehicle insurance provider will be able to settle your claims without much difficulty.

• Check the renewal procedure: Ideally renewing vehicle insurance online is the fastest and most efficient method of renewing the vehicle insurance policy. Ensure you choose an insurer who offers an easy renewal process.

• Read the policy wordings: It’s important to read the terms and conditions to understand each and every detail of the contract between the insurance company and you or the policyholder. Find out what is covered and not covered in the policy to safeguard your interests.

Financial implications of driving a car without insurance

Here’s a list of the consequences of driving a car without car insurance in India.

1. Non-compliance penalty

You can be penalized by the authorities if you drive a four-wheeler in the absence of a Third-party Car Insurance Policy. As per the updated Motor Vehicles Act 2019, the penalty for the first offence is Rs. 2,000 and for a second offence is Rs. 4,000. There is a chance of being imprisoned as well.

2. Paying third parties

If your uninsured car is involved in an accident where it has injured the third party, you will be liable to compensate the person monetarily. The same is applicable for damage to their property. In the case of an insurance cover, such situations are managed by the insurer. However, with a lapsed policy, you will have to pay the compensation from your pocket.

3. Repairing own damage

Repairing a car can be an expensive affair without the assistance of an insurer. In the absence of a valid policy, you will have to bear the entire burden of repairing your vehicle. In such a scenario, a massive repair bill can dent your savings.

4.Settling hospital bill for the personal accident

In the unfortunate incident of permanent damage due to an accident involving the insured car, the insurance company offers a cover of up to Rs.15 lakhs. This is also applicable to death due to an accident. Without the policy, the cover won’t be applicable. As a result, you won’t receive the monetary support and will have to pay the hospital bills yourself.

5. Rise in premium

If your car has been uninsured for a while, the insurer might want to inspect it before issuing a new policy. Such inspections often lead to a rise in the payable premium. The financial implication here is paying more insurance premiums for a Comprehensive Car Insurance Plan, which could have been easily avoided if the policy was bought and renewed in a timely manner.

Motor Insurance Benefits: Why Buy A Comprehensive Car Insurance Policy?

Here’s a detailed section on the benefits associated with a Comprehensive Car Insurance Policy.

1. Minimise financial implications

You can reduce the above-mentioned financial implications of not insuring your car by opting for a Comprehensive Car Insurance Policy. It can cover your finances because of the following points.

• No non-compliance penalty

• Financial assistance in settling Third-party Liabilities

• Insurance cover for repairing damaged car parts

• Personal Accident Cover for permanent car accident injuries

2. Better services

When you opt for a Comprehensive Cover, you unlock the option to purchase add-ons. These are additional covers that offer better insurance services or result in a higher pay-out at the time to claim settlement. Here are some popular car insurance add-ons.

• No Claim Bonus Protect

• Invoice Cover

• Zero Depreciation

• Roadside Assistance

• Engine Protect

3. Peace of mind

Simply knowing that you have an insurer to lean on during troubled times like a car accident is reassuring. Purchasing or renewing car insurance from a reliable and responsive car insurance provider can go a long way in ensuring peace of mind related to your overall car-riding experience.

Key Takeaways

Here are the top takeaways from this article.

• It is illegal to drive an uninsured car in India

• Non-compliance with The Motor Vehicles Act can lead to penalties

• Buy and renew car insurance in time to save money

• A Comprehensive Car Insurance Policy is a must for wide-ranging insurance coverage

• You can insure your car easily, quickly, and effortlessly by visiting www.acko.com.

FAQs about uninsured vehicles

Here are some frequently asked questions about driving an uninsured vehicle in India.

What are the consequences if I’m caught driving an uninsured vehicle?

If you are caught by the traffic police, you will have to stop your vehicle and produce the vehicle RC, your DL and the PUC certificate. You will be issued a traffic challan for driving an uninsured vehicle. This can be paid offline by visiting the nearest police station or you can visit the traffic police website to pay the challan online.

How to renew lapsed vehicle insurance?

Renewing an expired vehicle insurance policy might require inspections and assessment by the insurance company. Call the insurance company or visit their website to initiate the process of renewal. Post the assessment, the insurance will be renewed accordingly.

Is the fine for driving an uninsured vehicle the same for all types of vehicles?

Yes, the fine for driving without car insurance in India is the same across all types of vehicles.

What happens if you meet with an accident without insurance when you are at fault?

Third-Party vehicle insurance policy is mandatory as per the Indian law and failure to insure your vehicle will lead to a penalty and/or imprisonment. Also, when it is your fault, you need to bear the cost of damages and injuries to the third party.

What happens if you meet with an accident without insurance when you are not at fault?

Whether you are at fault or not, you need to insure your vehicle with Third-party insurance as per Indian law. Also, damages to your vehicle or injuries sustained by you or your passengers will have to be borne by you.

What happens if I get pulled over, and I have an expired car insurance policy?

You can be in serious trouble if you get pulled over and you don’t have a valid motor insurance policy. An expired policy is an invalid policy. Thus, you shall face penalties and the insurer will not cover you in case of damages to the vehicle.

Is the penalty for driving an uninsured old vehicle the same as driving an uninsured new vehicle?

Yes, the penalties for both categories are the same, i.e., Rs. 2,000 for the first-time offence and Rs. 4,000 for the second offence.

Can I renew the policy of someone else’s car like my uncle’s vehicle?

It is possible to buy/renew the insurance policy of a car that is not in your name. Thus, you can pay to renew the car insurance policy of your uncle’s car. Make sure to fill in the details asked during the purchase journey accurately.

How to find out if my car’s insurance is valid or has expired?

You can check out your car insurance policy’s status by going through your Policy Document or by contacting your insurance company. For example, you can log in to your account on www.acko.com and check the policy status easily.

What are the consequences of driving without insurance for a new car owner?

Whether you are a new car owner or own multiple cars, the consequences of driving without insurance remain the same. You will face penalties and the insurance company will not cover your vehicle for losses.

Can I renew a Comprehensive Car Insurance Policy without an inspection if my policy has not expired?

In most cases, a car inspection is not required if you renew the policy before the expiry date.

Will the insurer want to inspect my car while renewing the policy if it was not renewed for the past three months?

Three months is a long period for an uninsured vehicle. The insurer might feel the need to inspect the vehicle in this case.

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