After the new Motor Vehicles Act, motor insurance policies are selling like hot cakes.
Given that about 60 per cent of the vehicles on Indian roads are uninsured, despite it being mandatory to buy third-party motor insurance, the new Act is bringing the right change.
The Act, that came into effect on September 1, has increased penalties for driving errors. The law has increased the penalty for driving an uninsured vehicle from ₹1,000 to ₹2,000 and/or imprisonment up to 3 months, for the first offence and fine of ₹4,000 and/or imprisonment up to 3 months for the second offence.
Two-wheeler and car owners are now been rushing to get their lapsed policies renewed to avoid burning a hole in their pocket.
Policybazaar.com , an online insurance aggregator, has seen the overall share of two-wheeler insurance policy sales jump by seven times, and the share of four-wheeler policy sales increase by three times in the first week of the new Act.
Sajja Praveen Chowdary, Business Head, Motor Insurance, Policybazaar.com , said, “The share of policies being sold to consumers with lapsed plans has grown significantly in the last one week. In two-wheelers, Delhi, Karnataka, UP and Maharashtra have seen the highest jump in renewals.”
In Delhi, the share of expired policies getting renewed has jumped from 64 per cent to 94 per cent. Karnataka witnessed the second highest growth in the country, with the share of expired policies getting renewed rising from 65 per cent to 85 per cent.
In four-wheeler insurance, the highest growth in lapsed policy renewal has been witnessed in UP. The share of lapsed policies getting renewed in the last week, has increased from 34 per cent to 73 per cent. Delhi, saw a jump from 44 per cent to 79 per cent.