Summary of this article
Supreme Court extends third-party motor insurance tenure for new vehicles
New cars need four-year cover; two-wheelers require six years
Third-party insurance excludes own-vehicle damage from accidents, theft or floods
Standalone own-damage cover can supplement long-term third-party motor insurance
The Supreme Court (SC) has extended the period of mandatory third-party motor insurance for newly registered vehicles, increasing the requirement by one year for both private cars and two-wheelers.
New cars will now need third-party insurance for four years, against the earlier three-year requirement. For new two-wheelers, the mandatory period has been raised from five years to six years.
The move comes amid concern over the large number of vehicles being driven without valid third-party insurance. The court noted that lack of insurance can leave accident victims struggling to recover compensation. It has also proposed examining a “no insurance, no fuel” mechanism as part of efforts to improve compliance.
1 August 2026
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What Third-Party Insurance Covers
Third-party motor insurance is compulsory under Indian law. It protects the vehicle owner against legal liability arising from death or bodily injury to another person, or damage caused to third-party property.
However, it does not pay for damage to the policyholder’s own car or two-wheeler. If the insured vehicle is damaged in an accident, stolen, or affected by fire, floods or other covered events, a third-party-only policy will not compensate the owner for that loss, according to a recent report by Mint.
That is where comprehensive motor insurance becomes relevant. A comprehensive policy combines third-party liability protection with own-damage cover, subject to the insurer’s terms, exclusions and deductibles. Buyers can also opt for add-ons such as zero-depreciation, engine protection or roadside assistance where available.
Can You Upgrade An Existing Third-Party Policy?
Vehicle owners who already have a long-term third-party policy do not necessarily have to wait until renewal to widen their protection.
They can buy a standalone own-damage policy for the remaining period of the third-party cover. In many cases, the own-damage policy can be aligned with the expiry date of the long-term third-party policy. Together, the two covers provide protection broadly comparable to a comprehensive motor policy.
The premium for own-damage cover depends on factors such as the vehicle’s make, model, age, insured declared value, location, claims history and the add-ons selected. An insurer may also ask for a vehicle inspection or carry out underwriting checks before issuing the policy.
Do You Have To Buy Insurance From The Dealer?
Buying motor insurance from the vehicle dealer is not compulsory. A customer can compare policies and purchase cover directly from an insurer or through another authorised channel before taking delivery.
What is mandatory is that the vehicle must have valid third-party insurance before it is driven on a public road.
The SC has also issued directions aimed at speeding up older motor accident compensation cases. The matter is scheduled to come up again on August 18, 2026, when the court is expected to review compliance with its directions.
FAQs
How long is third-party motor insurance mandatory for new vehicles now?
New private cars will require four years of third-party insurance, while new two-wheelers will require six years, following the Supreme Court’s direction.
Does third-party insurance cover damage to your own vehicle?
No. It covers liability for injury, death or property damage caused to a third party. Own-vehicle damage requires standalone own-damage or comprehensive insurance.
Is it compulsory to buy motor insurance from the vehicle dealer?
No. Buyers can purchase insurance directly from an insurer or another authorised channel, as long as valid third-party cover is in place before the vehicle is driven on a public road.
