Do you need insurance when you buy a car in India?

Buying a car is a major milestone, but many people wonder if they can complete the process without having insurance in place. In India, laws and regulations make car insurance an important subject to understand before making a purchase. Having the right insurance not only ensures compliance with the Motor Vehicles Act but also protects you financially against theft and damage due to accidents. Understanding the different types of policies and their coverage can help you make an informed decision and drive with peace of mind.

Legal requirements in India

When it comes to owning a vehicle, motor insurance is not optional. The Motor Vehicles Act 1988 makes it mandatory for every car owner to have at least third-party liability cover before driving on Indian roads. This means that you cannot legally drive your new or used car without valid insurance.

Buying a new car without insurance

Dealerships generally ensure that a vehicle is sold with an active policy, as registration and delivery of a new car require proof of insurance. If you attempt to buy a new car without insurance, you may face delays in registration and will not be permitted to drive it legally.

Buying a used car without insurance

When buying a pre-owned car, the seller must either transfer their existing insurance to your name or you need to purchase a fresh policy. Driving a used car without coverage can result in penalties, as it remains a legal necessity.

Risks of owning a car without insurance

Owning a car without an active policy can have several consequences:

• Penalties: Driving an uninsured vehicle is a punishable offence.
• Financial burden: Any liabilities arising from third-party injuries, damage to their property or damage to your own car will have to be borne out of pocket.

Types of car insurance you can buy

In India, there are primarily two categories of coverage:

• Third-party liability insurance: Covers injuries caused to third parties and damages to their property due to an accident with your vehicle.
• Comprehensive insurance: Offers wider protection, including third-party liability coverage and protection to your own car. It covers theft and damages to your insured vehicle due to accidents, natural calamities and some man-made disasters.

Is it possible to purchase a car without insurance?

While you may technically buy a car without immediately arranging insurance, you cannot legally drive or register the vehicle without it. Whether it is new or used, the registration process requires proof of insurance.

Owning a policy need not be an expensive task. It can be made cost-effective with voluntary deductibles, anti-theft discounts, bundled coverage, renewal discounts and no-claim bonus in car insurance.

Conclusion

In India, you cannot legally drive or register a car without valid insurance. Whether it is a new or used vehicle, coverage is a mandatory requirement under the law. Insurance not only ensures compliance but also helps protect you from financial and legal consequences in case of accidents.

If you are looking for the ideal policy that suits your needs and budget, let us guide you with tailored solutions. Get expert car insurance advice by filling out the form on this page.

FAQs

• Is third-party liability insurance compulsory in India?

Yes, third-party liability insurance is mandatory for all car owners under the Motor Vehicles Act, 1988.

• Can I transfer the existing policy when buying a used car?

Yes, the policy can usually be transferred, but the process and requirements may differ depending on the insurer. It is best to confirm the formalities with the insurance provider.

• What happens if I drive without insurance?

Driving without insurance is a legal offence and may lead to penalties or fines as per Indian law.

• Does comprehensive insurance cover own damages?

Comprehensive insurance generally covers both third-party and own vehicle damages. Please read the policy document to understand the complete coverage.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.