From September 1 onwards, customers need to buy 3 year third party insurance for cars at the time of purchase and 5 years for bikes
India is one of the fastest growing automobile markets in the world and it is mandatory that all new cars/bikes must take insurance for first year at the time of purchase. But after first year, most of the owners don’t renew their insurance, which is not good for the user and for other people on road.
The Supreme Court has now said that out of 18 crore vehicles registered only 6 crore vehicles annually update insurance and in two wheeler segment more than 60 percent of buyers don’t update after the first year. From September 1 onwards, customers need to buy 3 year third party insurance for cars at the time of purchase and 5 years for bikes.
The court said that it is mandatory for all new vehicles and sales won’t be allowed without taking third party insurance cover. Insurance Regulatory and Development Authority of India (IRDA) has informed court that they are ready to provide extended third party insurance and asked court not to make it mandatory but it was rejected.
We can expect Insurance companies to introduce attractive schemes from September 1 and customers need to shell out more. But it’s better to have a third party insurance cover rather than not having anything. One of the reasons for customers not renewing insurance is the cost as full cover insurance is expensive these days.
But third party insurance won’t cost as much as comprehensive (bumper to bumper). First, we will explain comprehensive insurance, in which it covers all the damage to your car during an accident, fire, flood, third-party liability and theft. But it won’t cover wear and tear damage, mechanical problems or accident caused by a person who drive/ride without license.
Third Party insurance covers only any legal liability for damage or injury to a third party and it won’t cover any mechanical damage of your vehicle. Most of the companies recommend people to take comprehensive insurance but for entry level cars it is best to take third party insurance as it is more cost effective.