Why third-party insurance is essential for every vehicle owner in India; Know here

Nearly 50% Vehicle Owners Lack Third-Party Insurance, Awareness Still Low

New Delhi: Driving safely on the road is every vehicle owner's responsibility, but accidents can happen anytime, anywhere. In such circumstances, third-party motor insurance becomes a crucial means of protecting yourself and others. Surprisingly, nearly 50 percent of vehicle owners in India still don't have third-party insurance, even though it's legally mandatory.

Not Just Legal, Your Financial Security Too

Third-party insurance is often considered a means to avoid fines, but its true benefits are far greater. Even a minor accident can result in compensation and legal complications of lakhs of rupees. If a third party is injured, killed, or their property is damaged in an accident, third-party insurance covers the cost of that loss.

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What do IRDAI data say?

According to January 2026 data from insurance regulator IRDAI, more than 50 percent of vehicles in India ply the roads without third-party insurance. The biggest reason for this is lack of awareness. Road accidents are in the millions every year, and in such cases, third-party insurance acts as a protective shield for victims.

What does third-party insurance cover?

Third-party insurance primarily covers damage to others, such as:

• Injury or death of another person
• Damage to another person's property, such as a car, bike, or public property
• It's important to note that this insurance does not cover damage to your own vehicle, theft, fire, or your medical expenses.

Disadvantages of Not Having Third-Party Cover

If your vehicle doesn't have valid third-party insurance, it can have serious legal consequences. These include fines starting at ₹2,000, with increased penalties for repeat violations, suspension or revocation of driving license, and even imprisonment in serious cases. The court can also order compensation of lakhs of rupees.

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How much does it cost?

Third-party insurance premiums are determined under the Motor Vehicles Act. Typically, the annual premium for a car up to 1500cc is less than ₹3,500. Purchasing a long-term policy eliminates the hassle of annual renewals and is generally cheaper overall.

First Step to Responsible Driving

Third-party insurance is not just a form of insurance, but the first step towards becoming a responsible vehicle owner. It not only protects you from legal hassles but also plays a vital role in providing timely financial assistance to accident victims.