Is motor insurance mandatory in India?

Yes, motor insurance is mandatory in India as per the Motor Vehicles Act, 1988. There are two main types of motor insurance that are mandatory by law:

• Third-Party Liability Insurance: Every vehicle owner in India is required to have a valid Third-Party Liability Insurance policy. This type of insurance provides coverage against legal liabilities arising from third-party bodily injury, death, or property damage caused by the insured vehicle. Third-party liability insurance ensures that the owner of the vehicle is financially responsible for compensating third parties for any damages or injuries caused by the vehicle.
• Personal Accident Cover for Owner/Driver: Additionally, under the Motor Vehicles Act, it is mandatory for vehicle owners to have a personal accident cover for the owner/driver of the vehicle. This cover provides compensation in case of death or disability of the owner/driver due to an accident while driving the insured vehicle.

While third-party liability insurance and personal accident cover for owner/driver are mandatory by law, vehicle owners also have the option to purchase Comprehensive Insurance, which provides wider coverage for damages to the insured vehicle in addition to third-party liabilities. However, while comprehensive insurance is not mandatory by law, it is highly recommended for better protection of the insured vehicle and its occupants against various risks and uncertainties on the road.

Failure to comply with the mandatory motor insurance requirements can result in penalties, fines, and legal consequences for vehicle owners. Therefore, it is essential for all vehicle owners in India to ensure that their vehicles are adequately insured with the mandatory third-party liability insurance and personal accident cover for owner/driver as per the Motor Vehicles Act.