With an eye on reducing the large number of uninsured vehicles in the country, the insurance regulator has started a pilot initiative in Cyberabad, Telangana, to strictly enforce the provisions of the Motor Vehicles Act, which makes it a criminal offence to ply a vehicle without insurance.

“We have collaborated with the police and they will send challans to owners of vehicles without an insurance policy. What we have found (through the pilot) is that out of the 12 lakh registered vehicles, almost 25 per cent do not have an insurance policy,” said M Ramprasad, Member, non-life, Insurance Regulatory and Development Authority (IRDA).

More states to join project “If the results of this pilot are encouraging then we will extend it to seven more states. We are planning to collaborate with the Ministry of Road Transport to use their data on the number of registered vehicles to corroborate data from insurers,” he said.

A report by ICICI Lombard General Insurance said the number of uninsured vehicles in the country is estimated to be 40 per cent in the case of cars and 70 per cent in the two-wheeler segment.

Third-party motor insurance refers to the cover provided by insurers for damage caused by a vehicle to a third party’s property or life.

Third-party motor insurance is a loss making portfolio for general insurers with high claims ratios — in excess of 130 per cent in recent times. So, for every ₹100 collected by them as premium, insurance companies end up paying out ₹130 in claims.

Incidentally, IRDA is also planning to allow general insurers to introduce three-year motor insurance policies for the two-wheeler segment, which has seen a big drop in renewal of policies.

Currently, motor insurance policies are renewable annually. Ramprasad said the regulator is considering making it mandatory for two-wheelers to have a three-year motor insurance cover.

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