As per Supreme Court order dated 20th July 2018, the third party insurance for two-wheelers and cars are mandatory for a period of five years and three years respectively from the beginning of September 1. RTO will not register vehicles if the customer doesn’t get it done from September 1.
Vehicle Third Party Insurance:
Two wheelers, motor cars, commercial vehicles etc are covered by motor insurance. There are third party liability and own damage protecting cover. Third Party Insurance (TP) protects the victim during the occurrence of an accident, whereas Own Damage Cover (OD) protects the owner from damage/theft. Own Damage cover is optional, but third party insurance cover is mandatory.
With the new changes in third party, motor insurance acts, customer needs to pay a premium for long term during the purchase of the vehicle. Earlier days, 1st year premium used to be sold from or through the dealer. Later, for renewal, the customer approaches an agency or gets it done online.
According to researches, only 60% of cars and 25% of two wheelers older than three years, get renewed insurance policies, where the global benchmark is 90%. This uncertainty related to policy renewal will be reduced with the new regulatory changes.
In short, even if the long term premium will go high during the purchase of a vehicle, the insurance coverage protects the owner from unexpected damages or loses.
Still, drive safe! Your family is waiting! Life is beautiful!