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What if I Don't Have a Valid Car Insurance Policy at the Time of an Accident?

Author: Team Finpage
No Valid Car Insurance Policy at the Time of an Accident?
Tuesday, January 09, 2024

A valid insurance policy is not just mandatory for every car in India, it also protects you against financial liability associated with third party damage due to your vehicle by offering coverage for third-party disability, death or property damage in case of an accident. Car owners will receive cashless services in multiple network garages and hospitals across the country. Working with a trusted insurance provider ensures that the entire claim process is simple, quick and convenient. But what if you do not have 4-wheeler insurance at the time of an accident? Let’s find out what happens.

Consequences of Not Having a Car Insurance Policy

Legal implications: The Motor Vehicles Act, 1988, has made third-party motor insurance mandatory in India. The Insurance Regulatory and Development Authority (IRDAI) has mandated KYC verification for motor insurance customers too. If you are caught driving without valid car insurance, the traffic police might impose heavy fines. The updated Motor Vehicle Act, 2019, charges a specified penalty for the first offence and doubles this amount in case of a second offence.

Damage and Repair Costs: Getting into an accident without 4-wheeler insurance will also mean that you have to pay for damage repair costs from your own pocket. This could lead to a financial crisis in case the engine of the third-party vehicle has to be replaced or the car needs a complete overhaul. The most expensive parts of a car to fix are the head gasket, water pumps, radiators, clutch and the ECU. The expenses rise if it is a luxury car, such as a Mercedes, BMW or Land Rover. Car repair is costly because specialised skills and high-end diagnostic tools are required for intricate systems.

Penal Vulnerability: An accident due to negligence, which risks the lives of others is also a criminal offence, regardless of whether it is only a small injury or death. You might have to pay the compensation demanded by the third party. There are further expenses involved in settling legal matters, like filing an FIR. These are additional costs on top of repair charges if you do not have car insurance coverage. If you are unable to pay, your vehicle could be seized by the authorities.

So, the importance of car insurance cannot be overemphasised.

How to Get 4-Wheeler Insurance?

You can get insurance online or from an insurance agent. The basic documents required include your identity proof (passport, Aadhaar card or PAN card), driving license, recent passport-size photo, address proof and the vehicle’s registration certificate. Third-party motor insurance works even if you do not pick a comprehensive plan.

What Kind of Car Insurance Coverage Should Choose?

Depending on your requirements and budget for the premium, you can choose from:

  • Third-Party Insurance: This plan offers protection against damage to personal property and vehicle, and physical injuries of the third party.

  • Comprehensive Insurance: This is a combination of own insurance and third-party insurance. The insurance provider covers fire, theft, vandalism and natural calamities that could damage your car.

The importance of car insurance is evidenced by the financial and legal protection it gives you. So, make sure to do your research and find the best-fit motor insurance by assessing your needs and calculating the premium beforehand. Make sure to check policy premiums for both old and new cars. 

Team Finpage

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