Lesson 1 of 3 · 8 min
The cover for others, and the cover for you
A motor policy holds two different covers. Only one of them is compulsory, and it is not the one that pays a single rupee towards your own vehicle.
Motor insurance is the one insurance in India the law makes compulsory. Section 146 of the Motor Vehicles Act, 1988 says no vehicle may be used in a public place unless a policy covering third-party risks is in force for it.
That is why a certificate of insurance travels with the registration papers. Here is the part almost nobody is told at the counter: the compulsory cover pays the OTHER person, and not you.
The pedestrian you hit, the car you dented, the family of someone killed — that is who the money reaches. Towards your own scooter, lying bent at the side of the road, it pays nothing.
| Dimension | Third-party only | Comprehensive |
|---|---|---|
| Asked for by law | Yes — this is what section 146 requires | Yes, because the third-party part sits inside it |
| Who gets paid | The other person you injured, or whose property you damaged | The other person, and you |
| Your own vehicle | Not covered at all | Covered for fire, theft, accident and listed natural events |
| Pricing | The rate for this part is laid down by IRDAI, so it is the same at every insurer | Each insurer prices the own-damage part itself, after filing its rates with IRDAI |
What the law actually says
- Section 146
- Compulsory
- First offence, driving uninsured
- ₹2,000
- A later offence
- ₹4,000
- Death or injury to a third party
- No rupee ceiling
No motor vehicle may be used in a public place without a policy covering third-party risks.
Imprisonment of up to three months, or this fine, or both, under section 196.
The same imprisonment, and a larger fine, for a second or subsequent offence.
Section 147 sets the cover at the amount of liability incurred. There is no fixed cap for death or bodily injury.
It is my scooter, and my risk
KabirTara
Kabirasking
It is my scooter. If I scratch it, that is my problem to live with. Why does the law get to force me to insure something I am perfectly happy to risk?
Taraexplaining
Because the part the law asks for was never for your scooter. It is for the person you knock over on a wet Tuesday. If you have nothing, they get nothing.
Kabirasking
So the compulsory bit is protecting a stranger from me, not me from the road?
Taraexplaining
Both, in a roundabout way. A tribunal can order you to pay what an injured person lost. For death or injury the Act names no rupee ceiling — the cover is the amount of liability, whatever that turns out to be.
Kabirasking
And if I simply never buy it?
Taraexplaining
Then section 196 applies: up to three months inside, or ₹2,000 for a first offence and ₹4,000 after that. The compensation is still yours to find, with nobody standing behind you.
Myth
“Third-party insurance covers my bike if I crash it.”
False
IRDAI's handbook puts it in one line: with a Liability Only policy, damage to your vehicle is not covered. That policy exists to satisfy section 146 and to pay the person on the other side of the accident. Cover for your own machine is a separate section of a package policy, bought on top. A great many riders find out which one they are holding on the day they need the other one.
Sort it
1 / 4
You hold a third-party-only policy. Who carries the cost?
You hit a pedestrian, and a tribunal awards them compensation.
Quick check
A branch falls on your parked bike in a storm. Your policy is third-party only. Who pays for the repair?
Check yourself
1 / 3
Kabir asks
Third-party motor cover pays for —
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