More than 50% of vehicles in the country are deprived of proper insurance coverage, there are many dangers and challenges too.

New Delhi : India's automobile sector is growing rapidly. According to industry data, more than 158 million two-wheeler vehicles and 3.8 million cars were sold in fiscal year 2023, making India the world's second largest two-wheeler vehicle market. Despite this development, more than half of the vehicles on Indian roads are still uninsured. This low prevalence of motor insurance poses a risk not only to individual vehicle owners but also to society as a whole.

According to data from the Ministry of Road Transport and Highways, this trend of inadequate insurance coverage is widespread, with more than 50% of vehicles lacking proper insurance coverage. Its consequences are not limited to personal economic loss only but it also has a deep impact on the society.

Vehicle theft is also a serious problem

Vehicle owners who avoid comprehensive insurance may think they are saving money, but they are actually taking on a greater financial risk. Road accidents are common in India, and the cost of repairing or replacing an uninsured vehicle can be costly. According to the Insurance Information Bureau of India, in the financial year 2019-20 alone, insurance companies paid out 'own-damage' (OD) claims worth Rs 19,464 crore, with the average payout for two-wheelers at Rs 6,000 and for cars Rs 6,000. Was Rs 25,633. In the absence of insurance, all these expenses fall entirely on the vehicle owner. Vehicle theft is also a serious problem, with over 1 lakh theft claims registered in financial years 18-19 and 19-20. Vehicle owners who do not have vehicle insurance and who become victims of theft face serious financial crisis.

Health and economic challenges

Uninsured accidents can pose serious health and financial challenges. According to a World Bank report, there were 4.5 lakh road accidents in India in 2022, in which the injured had to stay in the hospital for an average of about 9 days. For families who do not have insurance, these medical expenses become a heavy burden. Especially in cases of elderly victims, this expense can go up to Rs 57,663, which can put them and their families in dire financial straits. The impact of uninsured accidents is not limited to the individuals affected, it also puts pressure on public health services and social resources.

Financial burden due to limited coverage

Many vehicle owners in India find comprehensive motor insurance to be an additional expense. They choose the minimum coverage required by law, i.e. third-party insurance, because it is the cheapest option. While it helps in following traffic rules, this limited coverage leaves vehicle owners unprotected from the financial burden caused by accidents, theft or other losses. To solve this, PhonePe has collaborated with insurance companies, giving users a wide coverage option. With this collaboration, PhonePe ensures its users peace of mind by providing cashless repairs across over 10,500 network garages in the country and users can fully understand their insurance policies. Vehicle owners can view, compare and buy insurance policies in just a few clicks. Being online saves time and makes the process simple. PhonePe removes the complexities and barriers that often prevent vehicle owners from availing adequate insurance coverage. Now users can choose from various plans from the convenience of their smartphones, so that they can get the plan that best suits their needs.

It is necessary to promote comprehensive coverage

Thought leaders can influence public perception and bring positive change in addressing the problem of low penetration of motor insurance in India. Using their platforms, they can dispel the misconception that comprehensive insurance is an unnecessary expense. Their recommendation can help present motor insurance as a social responsibility rather than a personal expense, protecting not only individuals but also the wider community. Low penetration of motor insurance in India is not just an individual problem, it is a societal issue that needs immediate attention.