A third-party insurance is mandatory under the Motor Vehicles Act, 1988.
The Centre intends to implement a system that will provide on-the-spot insurance coverage to uninsured motor vehicles. The government plans to deduct the premium from the owner’s FASTag account, according to a report in Livemint.
Findings revealed that 50 per cent of the vehicles on Indian roads do not have third-party insurance, which is quite alarming. The finding resulted in a proposal for on-the-spot insurance cover to extend mandatory third-party insurance coverage.
Apparently, several officials have stated that the proposal for on-the-spot insurance will be presented soon, and state governments will also be involved to bring in true integration with the prosecution agencies. There is likely to be a strong government-led campaign to spot people without vehicle insurance.
Previously, the General Insurance Corporation had held a discussion on on-spot insurance. Now, the recommendations from the earlier meeting regarding implementation of spot insurance would be discussed on March 17, 2023.
Insurance Premium Rates
The mandatory third-party insurance is intended to cover for any collateral damage to a third party. The premium for a 1,000cc car is Rs 2,094 per year, and for car with an engine capacity of up to 1.5 litre, it is Rs 3,416, while for cars above 1,500cc, it is Rs 7,890.
The premium rate for two-wheelers with engines between 150 and 350 cc is Rs 1,366 per annum.
The majority of car insurance companies offer quarterly or semi-annual payment plans, where you can split your annual premiums towards third party vehicle insurance cover. You may also opt for usage-based car insurance, where you can pay less premium for your car insurance if you drive less and drive safely.
A third party insurance provides coverage against physical injury and property damage caused to a third party, as well as personal accident cover for self and a pillion rider, which can be bought by paying additional premium. A third-party insurance is relatively affordable compared to other insurance policies.
