Around 54 per cent of vehicles plying on Indian roads are uninsured, MoS Finance Bhagwant Karad said in the Parliament on Monday. The total estimated vehicle fleet in the country is 30.48 crore (excluding data from Madhya Pradesh, Andhra Pradesh and Lakshadweep), of which 16.54 crore vehicles are uninsured, reported publication Business Today citing Karad’s written response to Lok Sabha.
Karad was responding to the question from Congress MP Lavu Sri Krishna Devarayalu on whether it is true that 40-50 per cent of all vehicles in India are uninsured. He also posed a question on 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.
Typically, a comprehensive motor insurance policy comprises of two parts- own damage and third-party insurance. Under own damage, the car is insured from damages due to accidents while third-party insurance, which is mandatory to buy, is to cover you from damages caused to a third party.
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Third-party motor insurance is mandatory in the country even then several vehicles remain uninsured. It is observed that one of the reasons for low penetration is the non-renewal of motor policies. “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,” the report quoted Tapan Singhel, MD and CEO, Bajaj Allianz General Insurance as saying.
To tackle 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.