Multi-year, third-party insurance mandatory for vehicle-owners

New Delhi / Chennai: In a move that will put all Indian vehicle-owners in a dilemma, the mandatory, multi-year, third-party insurance cover is coming into force from tomorrow.

All new two-wheelers registered by RTOs should have mandatory five-year, third-party insurance cover in addition to the existing mandatory one-year comprehensive insurance cover.

Private cars should have mandatory three-year, third-party insurance cover in addition to the existing mandatory, one-year comprehensive insurance cover.

It all started when the Supreme Court, in an order 20 July, said all two-wheelers and private cars sold in the country should have mandatory, multi-year, third-party insurance cover. Not only that, the court gave just around a month’s deadline for implementing the rule.

Every year, the Insurance Regulatory and Development Authority of India (IRDAI) revises third-party premium on 1 April. But, as the Supreme Court delivered a new order all of a sudden, IRDAI came out with the fresh set of rates in an official press release 28 August.

The release has come as shocker as third-party premium for cars has gone up to Rs 24,305 while that for two-wheelers has gone up to Rs 13,034 which get added to the on-road prices of the new vehicles.

With the mandatory, one-year comprehensive insurance cover already costing up to Rs 1 lakh, this cover is an additional burden, feel new car buyers.

They say the scheme will significantly increase vehicle running costs and reduce returns on investments.


Road accidents are the biggest killers in India. It is estimated that about 150,000 people lose their lives on Indian roads every year. Sources say that less than 45 per cent of two-wheelers are insured while only about 70 per cent cars are insured. Third-party insurance protects the vehicle-owner against third-party liabilities in case of an accident. Here, death or injury to pedestrians or other vehicle passengers is payable by the insurance company. Comprehensive insurance is optional and protects the individual’s vehicle against damage.


* Read the document carefully and ask doubts whenever and wherever needed.
* Get a written statement from the insurance agent while getting clarifications about sensitive claims.
* Approach the court in case of a dispute.

S Ben Raja