Driving License: The Union Finance Ministry may take a big step to deal with the increasing number of uninsured vehicles on Indian roads.
Driving License: To deal with the growing number of uninsured vehicles on Indian roads, the Union Finance Ministry has recently proposed a number of measures to expand third-party insurance. If this happens, documents proving third-party insurance for your vehicle may soon become mandatory for renewing your driving license, obtaining a Fastag or buying fuel.
According to the report, the proposed measures include requiring vehicle owners to prove that they have valid third-party insurance before they can buy fuel, obtain Fastag, renew their driving licence or even get their pollution under control certificate.
The ministry has also proposed that the government start sending text messages
to vehicle owners who do not have insurance. The move comes at a time when the Centre is looking to bridge the gap in India’s insurance coverage, which remains a matter of concern despite stringent penalties under the Motor Vehicles Act, as more than half of the vehicles on Indian roads are not insured for third party risks.
Up to three months in jail
Under the Motor Vehicles Act 1988, all motor vehicles must have an insurance policy covering third-party risks. Violators can face up to three months in jail. The Road Ministry is also likely to initiate strict enforcement measures. A notification is expected to be issued soon to ensure that all states and union territories implement these rules effectively.
“These proposals are being worked on and soon the road ministry may amend the rules governing the Motor Vehicles Act to link various vehicle-related compliances to third party insurance cover and issue necessary notifications. Also, the road ministry will issue necessary directions to all state governments and union territories for strict enforcement of the provisions of the Motor Vehicles Act that make compulsory third party insurance cover mandatory,” Livemint quoted one of the two sources on condition of anonymity as saying.
Currently, third-party insurance is mandatory for all motor vehicles under the Motor Vehicles Act of 1988, with penalties including imprisonment up to three months or fine if caught without it.
Vehicle insurance coverage in India is 50 per cent
Third-party insurance coverage in India was only about 50 per cent of the approximately 350-400 million vehicles plying on Indian roads in 2024, according to data from the Insurance Regulatory and Development Authority of India. A recent parliamentary standing committee report also underlined the need to address this gap and sought measures to address the issue. The panel also recommended that financial institutions should issue auto loans only after obtaining proof of insurance coverage.
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