Vehicle insurance is mandatory as per the Motor Vehicles Act in India. If you are driving a two-wheeler on a public road and your vehicle has an engine capacity of more than 50cc and can go up to the speed of more than 25 kilometres per hour, it must be registered with the Regional Transport Office. The vehicle owner must also get at least third-party insurance for the vehicle which must remain valid at all times. Strict penalties are imposed and consequences can be very harsh if you are found to be driving around without a valid two wheeler insurance policy.
Broadly the implications of driving without valid insurance can be categorized into two different categories – legal and financial, which are discussed below:
Legal Implications
- You can get a challan: This is the most basic and most common implication that you will have to bear if you drive around without a valid two wheeler insurance policy. If you are stopped by traffic police and are unable to show a valid insurance policy, you will be issued a challan of up to Rs. 2000 on the very first instance. In case you are caught driving without the policy again, the challan will be doubled to Rs. 4000. This much money can dig a significant hole in anyone’s pocket.
- Your vehicle can be seized: In case the traffic police find that you are driving around without valid insurance and if the traffic police officer has a reason to believe that you may not be able to present a valid policy, they can seize your vehicle and place it in an impound lot. Now you may have to go to traffic court to prove you have insurance and getting your vehicle freed from there can cost a lot of time and money.
- Your vehicle registration can be canceled: In case you are found to be driving around without valid two wheeler insurance and if you get involved in some mishap, the result can be catastrophic. The registration of your vehicle can even be canceled by the competent authority.
- Your driving license can be canceled: If things go out of hand, the competent authority can even cancel your driving license if you are found to be habitually driving around vehicles without a valid two wheeler insurance policy. In case your driving license gets canceled, you are completely stuck with having to walk, or having to use public transport or having someone drive you around. This is not a good position to be into!
- You can be sentenced to jail: In pure legal terms, this is the worst thing that can happen to you if you are caught driving without valid insurance. The court can send you to jail for as long as three months, and no one wants to go to jail for even a minute. Leave aside being in jail for three months because you wanted to save some money on insurance.
Financial Implications
These are the implications which mostly occur if you do not have your own damage bike insurance for your vehicle!
- No compensation if your vehicle is stolen: Bike theft is perhaps the most common vehicle related crime in India. If you have insurance and your bike gets stolen, the insurance company will compensate you appropriately. Otherwise, you have to bear the loss on your own.
- No compensation if your vehicle is damaged in an accident: Road accidents are very common in India and the reasons for this can be myriad. However modern bikes are expensive and so are the costs to repair them. Own damage bike insurance can pay for repair costs or compensate you if the wreck of your bike is to be written off as a total loss. Riding the bike without insurance means that you end up paying the repair cost or taking the total loss from your own finances.
- No compensation if your vehicle is damaged in natural calamity: India is a geographically diverse country and this also creates the problem of occasional natural calamity. If your bike gets damaged in cases like earthquake, cyclone etc. the insurance company will pay for repairs. No insurance means you end up getting repairs done at your own cost.
- No compensation if your vehicle is damaged in man-made disaster: Man-made crises like riots or strikes are also known to occur in India sometimes and you need to be prepared for that. Ideally, insurance pays repair costs if your vehicle is damaged in such a calamity. For those who do not have insurance, this is not an option and they end up paying repair cost form their own money
Combined Implication
This is a combined financial and legal implication which occurs if you do not have mandatory third-party insurance for your two wheeler and you get involved in an accident. When an accident occurs, the Motor Accident Claims Tribunal hears the entire matter and passes a judgment. If the tribunal finds that you are guilty, they will pronounce the judgment where you will have to pay compensation to the other party. In case of property damage the compensation can be as much as 7.5 lakhs. If a person is hurt, becomes disabled or dies, there is no upper limit to how much compensation they can get. If you have insurance, the company bears the cost of a trial in tribunal and compensation. Otherwise, you will have to bear all this on your own. Did you know that in 2002, a compensation of 12 crores (Source: The Economic Times) was given in an accidental death of a doctor! No one wants to be in such a situation!
Simply put, if you have a two wheeler, always make sure that you have valid insurance for it including both your own damage bike insurance and third party bike insurance.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales
