Understanding the Certificate of Insurance under the Motor Vehicle Act in India

Insurance plays a crucial role in the area of vehicular mobility and road safety by providing a financial safety net for car owners and other road users. In the context of India's congested highways, the Certificate of Insurance serves as a ray of financial stability, protecting rights and encouraging safe motor driving behaviour. In the framework of the Indian Motor Vehicle Act, this certificate is a crucial document that every owner of a vehicle has to have and fully comprehend. Let's navigate the complex world of the Certificate of Insurance as it is defined under the Indian Motor Vehicle Act, exploring its importance, ramifications, and function in promoting safe driving.

An In-Depth Explanation of the Certificate of Insurance

The Certificate of Insurance is a legally recognised document that complies with the requirements present under The Motor Vehicle Act, 1988. 

This certificate, which must be included with the policy paperwork, contains important information about the vehicle, the policy buyer and the insurance policy. To give an example, the Certificate of Insurance includes the policyholder's name and address, the duration of coverage, and details of the vehicle as some of the parameters.

The Certificate of Insurance has the following salient features - 

1. Coverage Types

Third-Party, StandAlone Own Damage, and Comprehensive insurance are the three main categories under which insurance policies fall within the purview of the Motor Vehicle Act, 1988.

Third-Party Vehicle Insurance: In India, all vehicle owners are required to carry this type of coverage. It protects against any obligations resulting from property damage, vehicle damage, accidental bodily injuries and accidental death to a third party. It does not pay for losses or damage to the insured car itself.

StandAlone Own Damage Insurance: While buying a new vehicle, vehicle owners have to buy long term policies (3 years for Car, and 5 years for Bike) hence to safeguard their own vehicle, they have to buy StandAlone Own Damage Insurance. This type of insurance safeguards their own vehicle against any damage that might arise 

On the other hand, as the name suggests, Comprehensive Vehicle Insurance provides a wider range of protection. In addition to protecting against third-party liability, it defends the insured vehicle from harm brought on by theft, fire, natural disasters, or accidents. It is a more well-rounded type of coverage that also permits addition of various add-ons for an improved safety net.

2. Granting and Renewing Insurance

As soon as the policy is purchased, the insurance company issues the Certificate of Insurance. The document must be renewed after a certain amount of time, usually every year, to guarantee that protection will continue. 

In order to prevent coverage lapses that could result in financial losses and legal issues, timely vehicle insurance renewal is essential.

3. Claim Procedure

One crucial element to understand about the Certificate of Insurance is the claim process, which outlines the procedure for requesting reimbursement in the event of an accident or loss. The certificate facilitates easy communication between the insured and the insurer and is an essential document during the claim settlement procedure.

Please Note: The Insurance Policy Certificate should be issued in the format, as stated in Form-51, containing all the necessary details about the vehicle, the policyholder and the policy.

How to get a Certificate of Insurance?

When you buy a car/bike or renew a car insurance policy, the insurer will issue the Certificate of Insurance along with other necessary policy documents, as mandated by the law. The Certificate of Insurance is a legal document, and any insurer must issue the certificate without fail.

What you need to do is submit some basic documents while purchasing or renewing a motor insurance policy, which will act as basis to get the Insurance Certificate. Apart from this, there is no special procedure required to be followed to get an Insurance Certificate. 

Whenever your vehicle is stopped by government authorities (Traffic police / State Police) for inspection, you should provide the Certificate of Insurance along with Driving License, Registration Certificate, and Pollution Certificate (PUC). Hence, always carry the Insurance Policy Certificate in your vehicle along with other necessary documents.

Form-51 Format

Form-51 contains all the necessary details of the motor insurance policy, insured vehicle and the policyholder. Below are the details of Form 51:

• Insurance Policy and Certificate Number:

  Vehicle insurance policy number and the Insurance Certificate number are important parts of Form-51, especially since these details are necessary when raising claims and during policy renewal.

• Registration Number:

  Vehicle Registration Number makes a key piece of Form-51 as it crucial for vehicle identification and mapping

• Vehicle Description:

  Vehicle description in the form of body type, fuel type, number of seats and doors, private / commercial make important Form-51 elements.

• Vehicle Make and Model:

  Vehicle make such as Maruti/ Honda, model such as Swift/ Amaze, along with the manufacturing year form a part of Form-51.

• Engine and Chassis Number:

   Engine Number and Chassis Number are necessary elements of Form-51, which are especially important when raising claims, doing inspection and during policy renewal. For electric/battery operated vehicles, the motor number should be mentioned.

• Seating/ Carrying Capacity:

  The maximum seating or carrying capacity of the vehicle also makes it a part of Form-51. For instance, if the insured vehicle is a four-wheeler, the seating capacity will be mentioned as 5-seater.

• Name and Address of the Policyholder:

  Form-51 also contains the personal identification details of the policyholder such as Name and Address of the Policyholder.

• Commencement of Policy Coverage (Date and Time):

  The date and time of commencement of the vehicle insurance policy also makes a part of Form-51.

• Insurance Policy Expiry Date:

  Policy expiry date and time also are important elements of Form-51. It is important to renew the policy before expiry to avail all benefits of the policy.

• Rules for Person/s entitled to drive the vehicle:

  Form 51 also contains the name of the people, with a valid driving licence, who can drive the insured vehicle.

• Limitations of Use:

  The Certificate of Insurance or Form 51 also states the exclusion criteria of the policy such as drunk driving, flouting traffic rules etc.

Regulatory Guidelines

Understanding the regulatory guidelines pertaining to the Certificate of Insurance is important in making a vehicle insurance buying decision. Let's examine some crucial clauses from the Motor Vehicle Act:

1. Mandatory Requirement: In accordance with the statute, every owner of a vehicle must possess a valid Certificate of Insurance as proof that the owner has the basic / government mandated third-party vehicle insurance cover.
2. As a result of technological advancements, the government has approved the use of digital certificate types, which make access and verification simpler.
3. Penalties for Non-Compliance: Not complying with the Certificate of Insurance guidelines brings with itself severe consequences, such as fines and jail time. In addition, the act also states that a vehicle can be impounded if it doesn’t have a valid Certificate of Insurance.
4. Function in Road Safety: The act aims to create a safer driving environment and provides insurance as a safety net to help those injured in auto accidents. The Certificate of Insurance is evidence of the owner of the vehicle's dedication to this goal.

Final Thoughts: A Culture of Accountability

Certificate of Insurance is more than simply a piece of paper, rather, it is evidence of building a safe and responsible driving culture that the Motor Vehicle Act aims to develop. Recognising the seriousness of this qualification as vehicle owners and members of the greater road ecosystem is a step towards creating a safer, more responsible driving environment.

The subject of the Certificate of Insurance is not limited to compliance with regulations. It includes a broader discussion about community responsibility, financial accountability, and road safety. Taking part in this discussion entails supporting an inclusive, safe, and considerate driving culture that recognises the diversity of Indian road users.

Let's embrace the Certificate of Insurance as a means of entering a community that values financial responsibility, safety, and respect as we work towards a future in which road safety is seen as a shared objective, rather than only a legal need.

FAQs

1. What is a Certificate of Insurance as mentioned in the Motor Vehicle Act?

The Certificate for Insurance provides proof that your vehicle has been insured. It is mandatory for all vehicle owners in India to have at least a third-party insurance policy, as mandated by The Motor Vehicle Act, 1988. The Certificate of Insurance provides proof of a valid third-party insurance policy.

2. What are the two primary types of insurance coverage mentioned in the Motor Vehicle Act?

The two primary types of insurance coverage as per the act are:

Third-Party Vehicle Insurance: It protects you against any obligations resulting from property damage, vehicle damage, accidental bodily injuries and accidental death to a third party. It does not pay for losses or damage to the insured car itself.

Comprehensive Vehicle Insurance: In addition to protecting against third-party liability, it defends the insured vehicle from harm brought on by theft, fire, natural disasters, or accidents. It is a more well-rounded type of coverage that also permits addition of various add-ons for an improved safety net.

3. Is it necessary to carry the Certificate of Insurance while driving?

Yes. Whenever your vehicle is stopped by government authorities for inspection, you should provide the Certificate of Insurance along with some other necessary documents. Hence, always carry the Insurance Policy Certificate in your vehicle.

4. Can I access the Certificate of Insurance digitally?

Yes, in keeping pace with technological advancements, the government allows digital formats of the Certificate of Insurance. It can be stored and accessed on platforms such as the mParivahan app or the insurer's app for easy access and verification.

5. What happens if I do not renew my Certificate of Insurance?

Not renewing your vehicle’s Certificate of Insurance makes you legally liable for any accidents or damages that your vehicle might be involved in. Moreover, you can also face fines, imprisonment, or your vehicle can be impounded as per the provisions of the Motor Vehicle Act.

6. What information is included in the Certificate of Insurance?

The Certificate of Insurance includes necessary parameters such as the policy number, the name and address of the policyholder, the period of coverage, and a detailed description of the insured vehicle, including its registration number.

7. What is the role of a Certificate of Insurance in the claim process?

The Certificate of Insurance serves as a vital document especially since it is necessary when raising claims. It helps facilitate communication between the insured and the insurer by providing all necessary details regarding the policy and the vehicle required for claim settlement.

8. Are there penalties for not having a valid Certificate of Insurance?

Yes, not complying with the Certificate of Insurance guidelines brings with itself severe consequences, such as fines and jail time. In addition, the Motor Vehicles Act also states that a vehicle can be impounded if it doesn’t have a valid Certificate of Insurance.

9. Can I upgrade my third-party insurance to comprehensive insurance?

Yes, you can upgrade your third-party insurance to a comprehensive policy, which offers a broader scope of protection, including coverage for damages to your own vehicle due to various contingencies like accidents, theft, and natural disasters.

10. How does possessing a Certificate of Insurance contribute to road safety?

Possessing a Certificate of Insurance is a testament to a vehicle owner’s commitment to fostering a safe and responsible road environment. It ensures that in case of accidents, victims can receive adequate compensation, thereby fostering a culture of financial prudence and community responsibility among road users.

11. How can I get the Certificate of Insurance?

When you buy a car/bike or renew a car insurance policy, the insurer will issue the Certificate of Insurance along with other necessary policy documents, as mandated by the law. Apart from this, there is no special procedure required to be followed to get an Insurance Certificate

12. Do I need to pay additional charges to get the Certificate of Insurance?

No, you do not need to pay any additional charge to obtain the insurance certificate. You only need to pay the insurance premium while purchasing/renewing the motor insurance policy.

13. Are Insurance Policy and Insurance Certificate different terms?

Yes, Insurance Policy and Insurance Certificate are two different terms. An insurance policy is an insurer provided coverage plan for your vehicle. On the other hand, the Certificate of Insurance is a document which proves that your vehicle is insured.

14. Will I get the insurance certificate if I buy a Third-Party Insurance Plan for my car?

Yes, you will get the Certificate of Insurance on any type of policy that you buy for your vehicle be it Third Party, Own Damage or Comprehensive Insurance for your vehicle.