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What to expect if you are caught driving an uninsured car?

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Published on March 3, 2021. EST READ TIME: 3 MIN

To be on the right side of the law, every car driver must keep four documents with them at all times. These are driving license, registration certificate, pollution under control certificate and car insurance policy. An important aspect of car ownership, you are legally required to have at least a third-party car insurance policy to be eligible to drive on Indian roads. As per the Motor Vehicles Act, driving a vehicle without insurance is a penal offence. If you are caught driving an uninsured car or if you are ever involved in an accident while driving an uninsured vehicle, you will be made to pay a fine and the overall repair cost of the vehicle repair will cause you nothing but financial distress.

What happens when you drive an uninsured car?

Basically, the penalties for driving a car without insurance can be classified in two categories. First, are the legal penalties, which the police and courts will enforce on you. Second, there are financial problems, which you will have to suffer when you have to pay the damage done to the third party and own car damage out of your pocket. Let us look at these one by one.

Legal fines and penalties of driving an uninsured car:

• Fine and challan: As per the Motor Vehicle Act, any person who is caught driving a vehicle without appropriate third-party insurance policy will be required to pay at least INR 2000 fine in the first instance. If the person is caught driving a car without insurance again, every subsequent event will attract a fine of INR 4000.

• Imprisonment: The court of law is authorised to sentence a person found to be driving a vehicle without proper insurance for 3 months in prison. The judge may also change the jail time to community service of the same duration on their accord.

• Court enforced third party damages: If there is more than one party involved in the accident, the court can pass damages to those other people, deeming the accident to be your mistake. You would be required to pay damages to the aggrieved party. If you have valid third-party insurance, the insurer would cover this cost, but people driving without insurance need to pay these damages from their own pocket.

Financial problems that occur from driving an uninsured car:

• Car repair cost: Did you know that the cost to repair some of the complicated parts in modern cars could run into tens of thousands or even lakhs of rupees. And, this is just the cost of replacement parts. You still have to account for labour charges for getting the car fixed, which is going to add thousands on its own. We are looking at a lot of money to be paid. All of this will be paid out of your pocket if you skimped on car insurance premium and did not renew your policy.

• Loss of No Claim Bonus: If you are a good driver and do not make a claim in a full year, the insurance company will reward you with a No Claims Bonus. This is a discount on the own damage component of your policy premium. If an expired policy is not renewed in 90 days, the company will remove the no claims bonus. For expensive cars, this bonus can run into thousands of rupees, which you leave on the table when you do not renew your policy.

• Loss of Personal Accident Cover: A personal accident cover of at least 15 lakhs is mandatory as per IRDAI for all people who drive a vehicle. If you only drive the car and let its policy run out, you will also lose the protection provided by this mandatory personal accident cover.

How long can you drive without insurance after buying a car?

You are not allowed to purchase a vehicle without insurance. So, it is illegal to drive a car without insurance in India. Even if you purchase the vehicle from a private dealer, you need valid insurance to be able to drive the car out of the showroom. If caught without insurance you will be liable to a fine in the event the traffic police catch you.

It must be kept in mind that this mandatory policy is only a third-party policy. It does not cover your own damage, as it is not a comprehensive policy. If you have purchased a new car, it is best that you also purchase comprehensive car insurance policy to cover your own damage.

Conclusion

Always keep in mind that car insurance is your protection shield against the unknown. If you are uncomfortable paying for car insurance in one go, it is best to start saving money anywhere between three to six months in advance before your policy expires. Never drive an uninsured car!

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance, he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

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