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Driving a Car Without Insurance: Know the Financial Implications

Team AckoJul 22, 2021

While understanding more about car insurance, it is likely that you must have stumbled upon the fact that car insurance is mandatory. Yes, it is mandated by The Motor Vehicles Act. But do you know what happens if you do not comply with the law? Are you aware of the financial implications of not being able to display a valid car insurance policy when asked by a police officer?

If the answers to the above-mentioned questions are ‘no’, then read ahead for insightful information about the financial implications of driving a car without insurance in India.

Driving A Car Without Insurance

Monetary Impact of Driving A Car Without Insurance

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

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. 4000. 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 a third-party, you will be liable to compensate the person monetarily. The same is applicable for damage to their property. In 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 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 premium 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) Minimize 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.

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.

Frequently Asked Questions

The following section covers some common questions and answers related to the implications of not having car insurance.

Can I drive my car without valid car insurance on a public road?

As per The Motor Vehicle Act 1988, a third-party car insurance policy is mandatory for a two-wheeler or four-wheeler. Not having motor insurance can lead to heavy penalties or imprisonment if you are caught driving on public roads without car insurance. Thus, it is advised to buy/renew car insurance for your vehicle at the earliest before driving.

What is the penalty for driving a four-wheeler without insurance after the first offence?

The fine for not having car insurance is Rs. 4000 for a repeat offence.

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.

What happens if I crash into someone else’s car and I don’t have a valid car insurance policy?

In such a case, the car you crashed into is considered as a third party’s property. Without a Third-party Liability Car Insurance Cover, you will have to pay the third-party damages from your own pocket.

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. 2000 for first-time offence and Rs. 4000 for a 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 the details asked during the purchase journey accurately.

How to find 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, 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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