NAGPUR: Approximately 80% of vehicle owners in the city do not renew their motor vehicle insurance. In case of an accident, the owner of the vehicle cannot claim insurance if premiums are not paid regularly, said Sharad Jichkar, regional transport officer, on Tuesday.

Jichkar was speaking at a seminar on 'Importance of third-party motor vehicle insurance' organized jointly by NGO Janakrosh and RTO at Regional Transport Office. National Insurance Company's regional manager at Nagpur MB Mishra and chief regional manager C Vijay Kumar gave a presentation in which they explained the disadvantages of not renewing vehicle insurance.

"Third-party insurance is called an 'Act only' because it is mandated under the Motor Vehicles Act so that compensation can be paid for death, injuries and damage to properties of persons other than the owner or driver of the vehicle," said Mishra. A person caught driving without valid insurance is liable to pay a fine of Rs1,000 or sentenced to three months' imprisonment, or both, he added. He also said that the government proposes to introduce a law to cancel driving licences and registration certificates of vehicles if the owner or driver is caught without having basic insurance.

Mishra pointed out that unlike comprehensive insurance, third party insurance does not cover property damages of the insured or theft. However, it will cover the cost of penalties as well as litigation charges which are to be borne by the person insured. Third-party insurance is also part of comprehensive policies. Statutory body Insurance Regulatory and Development Authority of India has kept standardized rates for third-party insurance premiums and companies cannot alter these rates. That is why anyone can buy the policies at a very low cost, said Mishra.

According to Mishra, unless there is a claim, premiums for third-party insurance become cheaper each year because companies give a 5% discount over the previous premium paid by the insured. "This is because vehicle insurances do not have maturity so the insured cannot claim the benefits," he said.

One of the adversities of a majority not renewing their insurance according to Mishra is that the burden on the judiciary increased due to a large number of litigations filed after loss due to road accidents. "Special courts have to be commissioned just for road accidents to dispose of cases," he said.
Although the first point of acquiring insurance is the dealership at the time of sale of a vehicle, Mishra said that owners should approach insurance companies and agents to renew insurances and present licence and other documents of the vehicle at the time of renewal.