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​​Motor vehicle insurance is very necessary for all motor vehicle owners in the country. As per the Motor Vehicles Act, no person shall be permitted to ply any vehicle on any public road in India without a valid insurance policy. Before 2019, the challan for driving any vehicle without a valid insurance war just about 100 Rs. When the traffic fines were increased in late 2019, the fine for driving any vehicle without a valid insurance policy was raised to Rs. 2000. This is 20 times increase and is among some of the steepest revisions in traffic fines.

​​Third party vs comprehensive motor vehicle insurance

Please note that the law requires that everyone must have a third party car insurance policy in order to legally drive a car. A third party insurance is one where the policy covers the damage that will be caused to any other person who becomes a victim in case a driver gets involved in a road accident. The concept is to cover the risk that is presented to other people on the road when someone plies their vehicle on a public road. If a person is driving a car on the road and because of some reason, they hit or run over another person with the car, the third party insurance policy will cover all the damage that needs to be paid to the person who was hurt in the accident. 

However, when you buy a vehicle insurance, you do not just buy a third party insurance but a comprehensive insurance. In a comprehensive insurance policy, the vehicle owner’s own damages are also covered. This means that if a person gets involved in an accident and their car or scooter suffers any mechanical or electrical damage, the insurance company will cover their own damage as well. Most of the times when you buy motor insurance online, you actually buy comprehensive policy which also covers own damage, unless you specifically look for and buy third party insurance. 

​Timely renewal of insurance is necessary

Considering the government has imposed lockdown on almost all of the businesses in India because of the pandemic caused by the corona virus, the government has also given an extension to vehicle owners that if their vehicle insurance expires during the lockdown period, they will be allowed to extend their insurance until May 15, 2020. This extension is only allowed to third party policy holders and to third party component of comprehensive policy. 

If your motor insurance policy expires during the lockdown period, you must renew ​car insurance​ policy because if you let it expire, your vehicle will lose its own damage protection as well as any no-claims bonus that you may have accrued may also expire. Remember that while the extension does provide you legal cover for third party insurance requirement, any and all damages to your own vehicle will not be covered if you meet any accident or your vehicle gets stolen during this period. 

​Moreover if you let your policy expire, you will also need to undergo a more complicated process to get new insurance for your vehicle which will involve vehicle inspection and vehicle photos and will take more than one day to complete whereas existing policy can be renewed in a matter of minutes with minimal formalities. ​