Home News General Motor Insurance Growth Surge Post New Motor Vehicles Act 2019

Motor Insurance Growth Surge Post New Motor Vehicles Act 2019

Recently, we were all in for a shock when the New Motor Vehicle Act was implemented by the central government, effective since the 1st September 2019 in most states. The common man and his wallet may have let out a cry, but insurance companies, especially those selling motor insurances were the ones doing the happy dance.

After all, bike and car owners were now looking for a bike and car insurance they could befriend! Online, digital insurance companies were one to benefit most out of this.

Thanks to their hassle-free quick processes of buying an insurance online. The new age insurance company, Digit Insurance that currently holds 2.38% of the total market share in the motor insurance industry, was one of the few who received multiple friend requests a.k.a insurance policy sales.

Especially from two-wheeler riders since until now, it was estimated that up to 70% of two-wheelers rode around town, uninsured. But with the rise and implementation of strict fines, things are only changing multifold.

Let’s take a look at some of the statistics that evidently show the rise in sales and consequent growth of the motor insurance industry in India. Subsequently, people too are now safer than before- with the simple act of obliging to traffic rules and road regulations.

  • Select states saw the highest jump in sales of Digit Insurance policies, such as New Delhi that saw a jump of 1371% sales followed by 818% in Jharkhand, 719% in Odisha, 679% in Chhattisgarh and 660% in Kerala.
  • Other states too saw significant surges in sales. For example; Uttarakhand saw a 649% rise followed by Haryana by 478%, Meghalaya by 450%, Bihar by 388%, Andaman and Nicobar by 338%, Assam by 300%, UP by 298%, Himachal Pradesh by 235% and Chandigarh by 224% respectively.
  • Within one week of the new bill implementation in September 2019, Digit saw a 163% rise in demand for insurance policies compared to that of August 2019.
  • As per Google Trends, searches on two-wheeler insurances too grew 15 times within the first week of the new motor vehicle act’s amendments. Likewise, with searches on common insurance terms, types of two-wheeler policies and the new fines on traffic violations.

What is everyone so concerned, you ask? Well, no one wants to shell out money unexpectedly. Especially not when the reason behind the fine could have been dealt with a lot less.

For instance; two-wheeler insurance premiums start from around Rs 750, whereas the fine for not having one can cost you Rs 2,000 and possible time in prison (up to 3-months) whereas the second time offence can cost you a straight sum of Rs 4,000! No wonder, it rather makes sense to get your two wheeler insurance than be overly cautious of not being caught by a cop and shelling out a large amount of money!

This could also be a reason why there wasn’t as much as a surge in four-wheeler vehicles (although there was a slight rise) due to its slightly higher insurance premiums- that are largely dependent on the make and model of one’s car, and the level of a customer’s customization with add-ons.

However, whether you have a two-wheeler or four-wheeler and no matter how high or low is the fine or premium, an insurance for your bike or car protects you from so much more, from multiple unforeseen situations, apart from just the fear of running into a cop! 😉

Here’s a list of some of the popular violation fines as per the new amendments of the new Motor Vehicle’s Act. (you know, just in case you were looking for the list of fines as well 😊)

VIOLATIONNEW PENALTY 2019OLD PENALTY 
Driving without License₹5,000 and/or community service₹500
 Driving under influence of Alcohol or other intoxicating substance·        ₹10,000 and/or 6 months prison

·        ₹15,000 and/or 2 years jail for repetitive violation.

₹2,000
Over speedingLMV: ₹1,000- ₹2,000
MPV/HPV: ₹2,000- ₹4,000
(+ license seizure)
₹400
Driving without seatbelt₹1,000 and/or community service₹100
Driving/riding without Insurance₹2,000 and/or 3-months prison, community service
₹4,000 for subsequent offence
₹1,000
Violating road regulations₹500- ₹1000₹100
Dangerous driving and jumping red light signal₹1,000- ₹5,000 and/or 6-months to 1 year in prison, license seizure₹1,000

 

Driving/Riding While On The Mobile (Handheld)₹5,000₹1,000
Speeding, Racing·        ₹5,000 and, or 3-months prison, community service

·        ₹10,000 for subsequent violation and up to 1 year in prison, community service

₹500
Not Giving Way To Emergency Vehicles Like Ambulances, Fire Engines, Etc₹10,000 and, or community service
Riding Without Helmet (Rider And Pillion Rider)₹1000, and or license disqualification, community service for 3-months₹100
Overloading Two-Wheelers₹2,000 and license disqualification and/or 3-months of community service₹100
Juvenile Offences₹25,000 with 3-years prison, cancellation of registration for 1-year, juvenile ineligible for license until 25 years of age.
Driving/Riding Despite Disqualification₹10,000, and/or community service₹500
Over boarding Passengers₹200 for every extra passenger and/or community service
Driving/Riding Without Ticket₹500₹200
Offence Committed By Enforcing Authorities Such As Offering BribesTwice the penalty (varies according to traffic rules violated)
Unauthorized Use Of Vehicles Without Lisence₹1,000- ₹5,000₹1,000
Disobedience Of Orders Of The Authorities₹2000₹500
Vehicles Without Permit₹10,000 and/or up to 6-months prison, community serviceUp to ₹5,000
Oversized Vehicles₹5,000 to ₹10,000 and/or community service
Overloading₹20,000 + ₹2,000 for every extra tonne and/or community service₹2,000 + ₹1,000 for every extra tonne
Driving/Riding Without License (For Aggregators)₹25,000 to ₹1,00,000
Driving Without Registration₹5,000
₹10,000 for subsequent offence
Using Horn In Silent Zone₹2,000
₹4,000 for subsequent offence