When I Forgot to Renew Car Insurance and Ended Up Paying a Hefty Fine
A valid insurance cover is mandatory for every car that runs on Indian roads as per the Motor Vehicles Act, 1988. When we buy a new car, by default an insurance policy comes with it. The on-road price of the car is inclusive of the insurance premium for your car insurance policy.
The difficulty arises when the policy expires after a year. Car insurance policies are usually issued for one year after which you need to renew your car insurance. If you do not renew it or forget to do so, you are driving a car without car insurance. Importance of having a car insurance is still catching up with people in many parts of the country. It is a dangerous fact that many vehicles on the road don’t have a valid insurance policy.
Recently, I returned from my 3-week beautiful and calming vacation. Next day on my way to work my car was stopped at a routine police check point. It is not unusual for cars to be stopped at temporary police check points for routine checking in any city in India.
Totally chilled about this, I greeted the officer with a smile irrespective of me getting late to work (nobody prefers to be stopped during morning rush hour). I was still in the holiday mood so it was all good. The Officer asked me to show him the license, insurance papers and PUC. I again smiled and said, “Yes Sir, give me a minute”. I reached over to my glove box and got the papers out and handed over to him.
The next words out of the Officer’s mouth put me in a panic mode and my mood was totally ruined. I was told to pay a hefty fine (recently further hiked by the government) as my insurance had expired 1 week back. Along with this,the Officer also explained me the consequences of driving a car without a car insurance. So, what exactly are these consequences? Read further to find out.
Covers your car if stolen
Car insurance protects you financially if your car gets stolen. The maximum pay-out will be the IDV mentioned inthe policy. IDV is the maximum amount that an insurance company is liable to pay you for your car.
Be prepared to shell out heavy fines
Recently the government has amended the motor vehicles act, 1988. Among many changes, the penalty for violating the traffic rules have been increased considerably. So, if you don’t want to waste your hard earned money on hefty fines please follow the traffic rules. Travelling without a valid insurance is an offence and will attract hefty penalty.
The list below includes old and new penalty for violating traffic rules:
| Old penalty (Rs.) | New penalty (Rs.) |
Driving vehicle at high speed (excessive/ above rules limits) | ||
First case | 400 | 1000 |
If repeated | 1000 | 2000 – 5000 |
Breaking the traffic signals | ||
First case | 100 | 500 |
If repeated | 1000 | 1000 – 1500 |
Without Seat Belt | ||
First case | 100 | 500 |
If repeated | 300 | 1000 – 1550 |
Drunk Driving Fine | ||
First case | 2000 or 6 month jail | 2000 – 5000 and/or jail for 6 months to 2 yrs |
or both | ||
If repeated | 3000 or 2 yrs. jail | 8000 – 10000 and 3 – 4 yrs jail |
Rough Driving | ||
First case | 1000 or 6 Month Jail. In some cases, both | 1000 and/or 6 month Jail. Sometimes both |
If Repeated | 2000 or 2 yrs. jail. In some cases, both | 2000 – 5000 or 6 month Jail. Sometimes both |
On Phone while Driving | ||
First case | 100 | 500 |
If repeated | 300 | 2000 – 5000 |
Pay for damages suffered to third party or property
In case you get in an accident and unintentionally harm any person or property, you are liable to pay for the loss suffered. This is known as the third party liability. Your car insurance mandatorily guards you against this third party liability and spares you the loss incurred.
In the absence of a valid car insurance cover, you would have to endure the losses sustained yourself. If in a very unfortunate case a person dies, your liability would be even higher.
Liability to pay for own damage
While it is mandatory to pay for losses suffered bya third party, what about your own losses. If an accident happens even your own vehicle suffers the damage. In some instances, this damage can put a big hole in your pocket.
If you have a comprehensive car insurance cover then your policy will take care of that also. Without an adequate insurance cover, that liability will also need to be borne by you. This will further increase your difficulties and cause a financial strain to you.
Face Legal Action
In an accident which causes damage to third party, you can get sued by the third party if you are found without a car insurance to pay for the financial loss. Apart from that you can also get imprisoned or would need to pay a hefty fine or in a worst-case scenario both.
Loss of No Claim Bonus
Car insurance plans allow a discount in the following year’s premium if you haven’t made any claim in the current year. The discount increases with every non-claim year and saves you a good amount on the premium payment.
If you don’t renew your car insurance in time besides paying the penalties and fines you also lose yourhard earned No Claim Bonus. Without NCB, you end up paying ahigher premium than what you could have if you hadrenewed the policy in time.
As I was profusely apologising to the officer for not remembering to renew my car insurance, my alarm on my phone went off. I realised it was a bad dream and nightmare that made me sweat when I woke up.
I was very relieved that it was just a dream. I straightaway checked my car insurance policy which also had co-incidentally expired. I immediatelygot on to an insurance brokerwebsite to renew my car insurance and instantly got my car insured and that too with a very good deal.
My bad dream could have been a reality, so please ensure that this harsh reality does not ever hit you. Be wise and secure yourself not only from the hefty fine but from the huge physical and financial loss too.
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