[ruzbehxyz]

Weak enforcement by traffic police in states, lack of follow-up by insurers and rising cost of third-party covers has resulted in a larger number of vehicle owners not renewing their motor insurance policy.

According to a report by the Insurance Information Bureau, the ratio of uninsured vehicles on Indian roads has gone up by three percentage points from 54% in FY18 to 57% in FY19.

Of the over 23 crore vehicles on road in India as on March 31, 2019, the percentage of uninsured vehicles was at nearly 57%. This means that about 13.2 crore vehicles on Indian roads are plying without the mandatory third-party insurance covers. Victims of accidents caused by these vehicles will not get adequate compensation as there would not be any one insurance company on which the liability can be pinned. The owners, too, have limited means to provide compensation.

According to the report in FY18, of the nearly 21.1 crore vehicles on road, 54% — or just 11.4 crore — vehicles were uninsured. In one year, the number of non-compliant vehicles has risen by almost 2 crore. The bulk of the uninsured are two-wheelers, which account for 75% of the vehicles on Indian roads, with the un-insurance being as high as 66%. There are 15 states with over 60% of their vehicles uninsured. The southern states fare better in terms of compliance.

According to insurers, it is possible for state governments to identify the uninsured vehicles as there is a database of insured vehicles. However, the problem is with enforcement. In Maharashtra, the state government this week decided to start recovering fines in cash after unpaid e-challans crossed Rs 600 crore.

For insurance companies, the low level of compliance results in a higher claims ratio as, on several occasions, the tribunals have held the insurers liable for compensation, asking them to recover from the insured.

The average settlement amount for death claims in FY2018-19 was Rs 9,01,207 and for injury claims it was Rs 2,51,094. This number has been growing year on year as it has been linked to income and inflation levels. Insurers, in turn, pass on the higher premium to vehicle owners in the form of costlier third-party liability cover, making the policies less affordable.

Source: https://timesofindia.indiatimes.com/...w/79652274.cms

[GTO]

Quite sad.

Just wanted to add that an overwhelming majority of these uninsured vehicles are 2-wheelers. Car owners are relative saints in comparison (only when it comes to insurance ).

[vigsom]

In India, vehicles are treated like FMCG goods - buy for cash and don't bother thereafter. Insurance and transfer of ownership are rarely followed. I am sure if similar stats are published for the number of vehicles where ownership hasn't been transferred, the number would easily be 65%.

Look at, for example, the system in the UAE. It is strict enforcement of laws and heavy penalties that is the reason behind an annual inspection of the vehicle, renewal of registration and so on. And the most compliant lot there are those from our sub-continent.

[Rahul Bhalgat]

As said above, the majority of uninsured vehicles are two wheelers. Car, having more value and more importance in an average Indian household, is relatively maintained better.

If a car owner does not want to buy the "own damage" cover, it is his discretion to bear the risk. But the third party cover is legally mandatory. In my opinion, the companies should not have hiked the third party premium disproportionately in last few years. The move seems to be aimed to cover the loss of revenue due to owners not opting the own damage cover.

This is not only an unfair business practice but this also deters a large number of owners to skip the insurance altogether.

[mvadg]

There's are massive amounts of malpractices in the insurance industry. This is the reason why 2-wheeler third-party insurance rates are so high. I'm not sure what kind of damage a 100 cc 2-wheeler can cause to justify such high premiums.
If you look at how the insurance industry works, it is similar to the government - pay your taxes and forget it. As always, regulators are hand in glove with the industry, the end consumer has near zero recourse.
Why doesn't the government charge a small cess on petrol and provide third-party insurance cover, though this will mean even more corruption.

[paragsachania]

While I come across a LOT of motorists, especially 2 wheeler commuters who simply do not renew their policies, I recently came across a 3rd Gen Honda City owner from my own apartment who had not insured his car since the last 3 years.

His car had an issue of coolant leaking in the driver footwell area, and the car had to be towed to the service center which is where the Service advisor informed this owner in front of us that the car had no insurance after checking the records while assessing the history of the car before diagnosing the issue. This gentleman has 2 cars and I suspect a similar case with the other one too! Forget mentioning that he we all respect him as an educated and learned gentleman.

Come rural areas, there is another trend - No Road Tax, No Insurance. So these fellas buy the 2 wheelers literally at Ex-Showroom price and use it for many years .

Having insurance always helps in case of accidents for your own good but not having one can lead to serious consequences when there is a 3rd party involved. This is something most wont realise till reality strikes them hard.

On similar note, we always wonder why cops stop only 2 wheeler riders than cars and its pretty simple:

- 2 Wheelers are relatively easily to learn and hence almost anyone can ride while cars may compel one to visit a driving school and then apply for a licence
- 2 Wheelers when involved in any incident/accident generally do not cost a bomb for repairs (or even ignored) but when it comes to cars, the insurance renewal is a must and people know that not having one can really burn a deep hole in their pockets

[saikarthik]

It is quite depressing to see such high numbers. Even I know a person who has an i20 but no insurance.
His justification was even depressing to listen to, as he said " I don't use the vehicle much and if I use it its only for long highway drives".

There was a situation where my own dad didn't insure his Honda Activa (almost 13 years old) - he said that the reason as "I don't take it out much" and "the value of the vehicle is too low, but the insurance costs ~1.5k". BTW, My dad's smokes/other unwanted expenses cost him more than that in a month.

I purchased the insurance then and there (we were out with that Activa on that occasion - to renew my CBR's insurance).

People spend money on unnecessary stuff and become quite a miser when it comes to essentials.

[ninjatalli]

Originally Posted by GTO

Quite sad.

Just wanted to add that an overwhelming majority of these uninsured vehicles are 2-wheelers.

Very true. I'm guilty of it over the last ~16 years of bike/scooter ownership - basically once the vehicle passes year 3 / 4, the option to let the insurance renewal relapse is a decision taken very easily.

For me this happened after I went through a claim for my Pulsar150 in the 4th year of ownership - the amount of effort and documentation I had to provide to get a meager (<<10k) payout over a 1 month timeline for the claim was too much for me. After that if my memory serves me right, I lapsed on the renewals for the next 5 years of ownership of the bike.

An off-topic question to all bike owners of vehicles less than 150cc - have you ever availed an insurance claim after year 4? How's the experience been?

[kannan666]

While the percentage of uninsured vehicles looks high, there are also a lot of cases where the vehicle has been shelved/trashed or put into cold storage due to various reasons.

[mvadg]

Originally Posted by ninjatalli

Very true. I'm guilty of it over the last ~16 years of bike/scooter ownership - basically once the vehicle passes year 3 / 4, the option to let the insurance renewal relapse is a decision taken very easily.

For me this happened after I went through a claim for my Pulsar150 in the 4th year of ownership - the amount of effort and documentation I had to provide to get a meager (<<10k) payout over a 1 month timeline for the claim was too much for me. After that if my memory serves me right, I lapsed on the renewals for the next 5 years of ownership of the bike.

An off-topic question to all bike owners of vehicles less than 150cc - have you ever availed an insurance claim after year 4? How's the experience been?

I've been unable to claim a single paisa even with comprehensive insurance for the same reasons with my two wheelers. Insurance is a big scam, even renewing two wheeler insurance with some of the PSUs is extremely difficult given their timings and reluctance to use technology, though things seem to have changed a bit now.

They should allow self insurance. Of course, nothing in our country works as it should, so assuming liability has little meaning. That's why I think we should do away with this 3rd party insurance for 2-wheelers - I don't see the government pay anything if their roads cause accidents.

I do see BESCOM generously paying compensation from public funds for deaths due to electrocution, where I'm sure the loot is divided among the officials, the advocates fighting the case and any others before it reaches the victim's family.

[Rahul Bhalgat]

Originally Posted by ninjatalli

Very true. I'm guilty of it over the last ~16 years of bike/scooter ownership - basically once the vehicle passes year 3 / 4, the option to let the insurance renewal relapse is a decision taken very easily.

For me this happened after I went through a claim for my Pulsar150 in the 4th year of ownership - the amount of effort and documentation I had to provide to get a meager (<<10k) payout over a 1 month timeline for the claim was too much for me. After that if my memory serves me right, I lapsed on the renewals for the next 5 years of ownership of the bike.

Originally Posted by paragsachania

While I come across a LOT of motorists, especially 2 wheeler commuters who simply do not renew their policies, I recently came across a 3rd Gen Honda City owner from my own apartment who had not insured his car since the last 3 years.

Availing own damage cover is the discretion of the owner. If he is willing to bear the risk, it shall be fine. As ninjatalli pointed out, there are many cases where it is not worth having insurance company bear the risk. When a loss is suffered, it turns out that you are being sold merely the papers besides verbal assurances. Peace of mind only until you suffer a loss.

Insurance is basically a concept of risk pooling. In my family, I have 4 two wheelers and one car. We may add another two wheeler and another car in near future. I do the risk pooling of my four scooters myself and bear the risk. Ironically, it is much much cheaper than an insurance company pooling the risks of millions of two wheelers! Instead of paying the premium, if you set a little money aside every year, you can fund your damages quickly without hassles and at lower cost. On the other hand, if I decide to buy own damage cover every year for the four two wheelers for 10-15 years, I will be spending an amount that can buy me a new scooter!

I have been having a comprehensive insurance for my SX4 for quite a few years. But since last few years I have been taking only the third-party cover. And here I feel cheated by the unfair practice of the insurance companies. Even if the owner is willing to bear the own damage risk on his own, charge him the premium in disguise by hiking the mandatory third-party premium.

Even my clients / friends / relatives, who availed a cover for the plant and machinery with perils of fire, flood etc. are not happy with the insurance. Everyone has repented spending on insurance after they suffered losses. Even after considering the due deductions like under-insurance (people selling the insurance never warn about this), they were not compensated enough and in time. It turned out they they merely purchased deceptive peace of mind. And that deceptive peace of mind was nullified by the hassles in the process of claims.

Those who have influence and ability to articulate the people / system get (or extract) more benefits from the insurance from the funds from other innocent insurance buyers.

Other than this, I appreciate with the concept of insurance and it's utility in life and business. Peter Drucker had said that the two most important inventions of the mankind were non technical. One was the concept of insurance and the other one is that of the installment credit.

[AZT]

Originally Posted by paragsachania

Come rural areas, there is another trend - No Road Tax, No Insurance. So these fellas buy the 2 wheelers literally at Ex-Showroom price and use it for many years .

Can the showroom even do this, sell you a vehicle without road tax. Registering a new vehicle requires insurance right ?

[paragsachania]

Originally Posted by AZT

Can the showroom even do this, sell you a vehicle without road tax. Registering a new vehicle requires insurance right ?

They don't register, this is where it starts from.

[AZT]

Originally Posted by paragsachania

They don't register, this is where it starts from.

So you're saying the number plate is fake

[paragsachania]

Originally Posted by AZT

So you're saying the number plate is fake

Not really. What I am referring to is the fact that we encountered near Jabalpur, MP few years back.

Brand new Splendor (blank number plates), swipes with a truck while entering the main carriageway, suffers a fall and then when their relatives arrive and block the road and they start negotiating a cash deal to fix since the vehicle doesn't have insurance.

This is a very common sight across India, especially interior and rural villages. You will many times notice 2 wheelers riding without any numbers on the plates and that means its neither registered nor have paid the road tax.

And to fix this, though we have a law, there is lot that happens and goes unnoticed.