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    Are fines for non-insurance of your vehicle effective?

    As per the Motor Vehicle Act 1988, it is compulsory for vehicles to be insured (atleast for Third Party Liability) and the Certificate of Insurance is proof of such insurance to be produced when requested by the authorities.

    Violators are fined Rs. 2000 to Rs. 4000 and/or imprisonment up to 3 months – this varies from one state to another.

    It is inevitable for all new vehicles insurance to escape insurance, however, after the first year, there is nothing to stop an individual from illegally using his vehicle uninsured! Save perhaps a fine ranging from Rs. 2000 to Rs. 4000, only if they are caught! But is this enough?

    This, in effect, a vehicle owner has two choices – risk being caught and paying a fine or undergoing imprisonment – OR – have their vehicle insured by paying a premium which is likely multiple times a fine.

    Instances of imprisonment do not exist, till date. In fact, 80% of vehicles in rural areas go uninsured and most escape fines or imprisonment.

    Perhaps better awareness about the importance of insurance can work better where the threat of fine or imprisonment doesn’t.

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