Uninsured vehicles mount up

It is surprising to note that about one out of every three vehicles running on the roads of India are uninsured. As a matter of fact, the third party liability insurance cover is compulsory for the owners of the vehicles but a surprising number of them are uninsured. The third party liability insurance, covers the legal liability of insured towards third party personal injury and property damage arising out of an accident involving the insured vehicle. Despite the coverage being mandatory, a huge number of the vehicles are not insured, the main reason being, the insurance companies do not encourage standalone third party insurance since it is a loss making business for them. Not only this, the old vehicles are also not offered insurance coverage because the premium paid is comparatively lower than the payout by the insurance companies. Hence the vehicle owners are bound to break the law. On the other hand, the private insurance companies have tied up with the vehicle manufacturers by offering them attractive deals. This has worsened the case of loss making business, as the premium for new vehicles is fairly high as against a liability-only cover.