More than 50% of vehicles plying on Indian roads are uninsured, says MoS Finance

Around 54 per cent of vehicles plying on the Indian roads are uninsured, MoS Finance Bhagwant Karad informed Parliament on Monday. The total estimated vehicle fleet in country is 30.48 crore (excluding data from Madhya Pradesh, Andhra Pradesh and Lakshadweep), of which 16.54 crore vehicles are uninsured, the minister of state in the ministry of finance said in a written reply to Lok Sabha.

A comprehensive motor insurance policy consists of two parts- own damage and third-party insurance. Own damage covers the car from damages covered due to accidents while third party insurance, which is mandatory to buy, is to cover you from damages caused to a third party.

"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. As an industry, it is our endeavour to ensure that every vehicle on the Indian road is insured. It is good to see the discussion around motor insurance taking place and we are sure this will create a lasting impact and help increase the adaptability of motor insurance," said Tapan Singhel, MD and CEO, Bajaj Allianz General Insurance.

Karad was replying to the question raised by Lavu Sri Krishna Devarayalu on whether it is true that 40-50 per cent 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. MoRTH informed the Parliament that no such proposal is under consideration at present.

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

Also Read: AIS App For Taxpayers: Check your income details on this new app launched by Income Tax Department