Despite Compulsion, More Than 50% Vehicles In India Running Without Insurance, Says Govt

Signalling the low penetration of vehicle insurance in our country, the government has revealed that despite third-party insurance being compulsory, more than 50% of vehicles on Indian roads are still not insured.

16.5 Crore Vehicles Not Insured

TOI

This was disclosed by the government in response to a Parliament query. Minister of state for finance Bhagwat Karad, replying to a query from Lavu Sri Krishna Devarayalu, said that there are 30.5 crore vehicles on Indian roads. This is according to data from the road transport and highways ministry and does not include MP, AP, or Lakshadeep. Of these vehicles, 16.5 crore are uninsured (i.e., 54%).

Karad was replying to the question raised by Lavu Sri Krishna Devarayalu on whether it is true that 40¨C50 percent of all vehicles in India are uninsured.

He also asked whether the government is planning to introduce a mechanism that will provide mandatory on-the-spot third-party insurance cover for motor vehicle owners and, if so, the details thereof; and whether the government has set a deadline for the same and, if so, the details thereof. Karad informed the Parliament that no such proposal is under consideration at present.

Also Read: Inclusion Of Mental Illness In Health Insurance Made Mandatory

Third Party Insurance In India

gomechanic

¡°Third-party motor insurance is mandatory in India. However, many vehicles remain uninsured. Often accident victims are unable to get adequate compensation because of the lack of motor insurance, and each year this pushes thousands of families below the poverty line,¡± said Tapan Singhel, MD & CEO of Bajaj Allianz General Insurance and Chairman of the General Insurance Council, as per a TOI report.

The insurance regulator has been discussing several measures to insure vehicles operating without cover. Sector regulator IRDAI had suggested that insurance companies could engage with state governments and compare data from the regional transport offices with insured vehicle data to ensure complete coverage.

One of the reasons for low penetration is the non-renewal of motor policies, as per the Business Today report. To address the problem, the Insurance Regulatory and Development Authority has proposed to allow long-term motor insurance policies in order to give policyholders a wider choice. The regulator has proposed a 3-year policy in respect of private cars and a 5-year policy in respect of two-wheelers, both co-terminus with third-party liability cover.

Also Read: Explained: How Much Of Your Money Is Insured If A Bank Collapses

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