The new motor law, which has come into effect from this month for vehicle drivers, may have become a cause of trouble, but it has come as a boon for the insurance industry. The vehicle insurance sector is buzzing since the day the new motor vehicle law came into force. In the last few months, due to the slowdown in the auto sector, a big decrease in business has brought new life in the insurance companies. In the new law, the amount of fine has been increased from one thousand rupees to two thousand rupees if there is no third-party vehicle insurance. To avoid this penalty, the number of people taking motor vehicle insurance has increased immensely. According to experts, roughly 70 per cent of the vehicles in the country are running on the roads without insurance. By insuring them, a substantial increase in the premium revenue of the general insurance companies is expected.
In his statement, ICICI Lombard General Insurance Company chief (Reinsurance and Claim) Sanjay Dutta said that so far in September, the number of auto insurers has seen an increase of three times as compared to the normal months. This is the effect of the new automotive law. Till now, people used to ignore vehicle insurance renewal when the vehicle was old. But now it has become easier for them to get insurance products because in the case of two-wheelers, usually, the insurance fee is less than the penalty for driving without insurance. In a way, the new Motor Vehicle Act has increased awareness about auto insurance.
In this case, Gurneesh Khurana, president and country head of the motor insurance business of Bajaj Allianz General Insurance, estimates that 70 per cent of the two-wheelers run on the roads in India are uninsured. People do not buy auto insurance mainly due to lack of awareness. Some people buy auto insurance only under legal obligations. In the event of an accident, people often have to pay heavy damages due to lack of insurance, which is sometimes out of the power of the driver. After the implementation of the new Motor Vehicle Act, the fine has been increased from Rs 1,000 to Rs 2,000 if there is no third party insurance. In comparison, the amount of insurance is much less. The customer can also get insurance for five years. Khurana says, "Everyone who owns a two-wheeler should take comprehensive vehicle insurance. If there is any damage to the third party in the accident, then it can also be repaid." There are 25 general insurance companies in the country providing motor insurance.