Is Third-Party Insurance Mandatory from Day One for a New Car?

Yes, in India, it is mandatory to have at least a third-party car insurance policy from the very first day of buying a new car. As per the Motor Vehicles Act, 1988, no vehicle is allowed on the road without a valid third-party insurance plan. In fact, since September 2018, the Insurance Regulatory and Development Authority of India (IRDAI) has made it compulsory for all new car owners to buy a long-term third-party insurance cover (usually 3 years) at the time of purchase.

Third-party insurance is the most basic type of car insurance you must have to legally drive your new vehicle. It covers damages or injuries caused by your car to others, but does not cover your own vehicle’s damages.
When you opt for insurance for a new car, you will be offered two main options:

A third-party plan is more affordable and fulfils the legal requirement, while comprehensive new car insurance offers wider protection, including damage to your own vehicle.
 

There are various reasons why regulators insist on third-party insurance before a new car hits the road:

Here’s what’s included:

While third-party insurance is mandatory, here’s how you can make a smarter choice for your new car:

Third-party insurance is mandatory from day one for a new car in India. Without it, you cannot drive your vehicle legally. While a basic plan is affordable and fulfils the law, opting for comprehensive new car insurance gives much better financial protection.