Heard a lot about Motor Vehicle Act? Want to know how is it related to car insurance? How exactly it functions? Read on to find out more about it.
The Motor Vehicle Act, 1988 is an Act of the Parliament of India that enforces regulations in all aspects of motor vehicles that ply on Indian roads.
The Act came into force on 1st July 1989. It details the provision of licensing the driver, the registration of any vehicles, the insurance arrangement, traffic rules, penalties, etc.
Insurance Details in the Motor Vehicle Act
Among all others, a valid insurance policy is the key highlight of the Motor Vehicle Act 1988. This Act mandates the third-party liability policy, which covers the risk of any damage caused to a third party.
Later, a comprehensive insurance although not compulsory helps in getting the necessary compensation in case of vehicle damage.
The Necessity of Car Insurance under the Motor Vehicle Act
A motor vehicle is a dangerous threat in public places. Under negligent conditions, it can cause physical damage, roadside injuries, damage to the vehicle of a third party or even death to self or a third party. Hence, a motor vehicle is compulsorily required by law to be insured for any third-party damages. By law, a third party is any person except the owner or passenger of the private vehicle.
What does the Act cover?
- The Motor Act covers any damage to their vehicle, bodily injury or death. It includes any person in public vehicles such as bus, taxi, contract vehicle or pedestrians.
- The third party does not cover the owner of a car or two-wheeler vehicle or co-passenger or pillion rider.
The comprehensive policy covers the occupants of the private vehicle without an additional premium.
Don’t Try to Escape the Law
In case you are driving an uninsured car, you may have to face severe consequences. Some of these include:
- The penalty of Rs. 1000 or an imprisonment of 3 months
- Suspension or seize hold of license
- Suspension of car registration
These penalties can be severe for the person who faces them. Hence, you should never take these aspects lightly. Always keep your vehicle registration and policy documents handy with you while driving.
Know Your Certificate of Insurance
As per the terms and conditions of the Motor Vehicle Act, your insurance company gives you the certificate of insurance. It is issued as per the format of Form 51 with following details:
- License number
- Policy number
- Registration number of the vehicle
- Model number
- Make of the vehicle
- Chassis number
- The passenger carrying capacity of the vehicle
- Registration details include the date of registration of the vehicle
- The city of registration
- Name and address of the policyholder
- The duration of the insurance policy (including the time of commencement)
- Date of expiry
- The Inclusions and exclusions of the policy
All the above details are vital for the car owner, and they must be aware of them. You should always keep the insurance with you.
Remember, most accidents occur due to one’s negligence or due to the fault of the others on the road. In such cases, taking extra care on our part can save us from mishaps. Thus, insurance policies act as safeguards for us as well as for third-party members in case of any incident beyond our control.