Is 3-Year Car Insurance Mandatory in India? Latest IRDA Rules Explained
Many car owners in India are confused about whether 3-year car insurance is mandatory and how long the rule actually applies. This confusion often leads to wrong renewals or unintentional policy lapses. Here is a simple explanation based on IRDAI guidelines.
What Is the 3-Year Car Insurance Rule?
The 3-year car insurance rule applies only when you purchase a brand-new private car in India.
As per IRDAI:
Third-party car insurance must be purchased for 3 years at the time of new car registration
This rule is mandatory and applies nationwide
This requirement was introduced to ensure that all new vehicles remain insured for a longer period without renewal gaps.
Is 3-Year Car Insurance Mandatory Every Time?
No.
The 3-year insurance requirement:
Is mandatory only once, during new car purchase
Is not mandatory for every renewal
Does not apply again after the first 3 years are completed
After this period, car insurance can be renewed yearly.
What Happens After 3 Years of Car Insurance?
Once the initial 3-year period is over:
You can renew your insurance annually
You may choose only third-party insurance
You may opt for comprehensive insurance
You are free to change your insurance company
There is no legal obligation to buy another 3-year policy again.
Is Third-Party Insurance Mandatory After 3 Years?
Yes.
Even after the 3-year period:
At least third-party car insurance is compulsory
Driving without valid insurance is illegal under Indian motor laws
However, the policy duration can be one year at a time.
Can You Buy Only Third-Party Insurance After 3 Years?
Yes.
After completing 3 years:
You can purchase only third-party insurance
Comprehensive insurance is optional and depends on vehicle condition and risk preference
Many owners of older cars prefer third-party-only policies.
Why Did IRDAI Introduce the 3-Year Rule?
IRDAI introduced the rule to:
Reduce the number of uninsured vehicles
Improve road safety compliance
Protect accident victims through guaranteed coverage
Earlier, many vehicles were found uninsured due to missed renewals.
After completing the mandatory period, you can explore suitable motor insurance options
After 3 Years – Which Motor Insurance Policy Can You Buy?
Frequently Asked Questions (FAQs)
Yes, 3-year car insurance is mandatory only at the time of purchasing a new car in India. This rule mainly applies to third-party insurance as per IRDAI guidelines. After completing the initial 3 years, renewal can be done on a yearly basis.
Yes, after 3 years you can choose to buy only third-party car insurance on an annual basis. However, third-party insurance covers only legal liabilities and does not cover damage to your own vehicle.
If you do not renew your car insurance after 3 years, your policy will lapse. Driving without valid insurance is illegal in India and may result in fines, penalties, or claim rejection in case of an accident.
A 3-year third-party insurance policy is enough only for third-party claims such as injury, death, or property damage to others. It does not cover your own car’s repair costs. For better protection, comprehensive insurance is recommended.
Yes, after completing the 3-year insurance period, you are free to change your insurance company at the time of renewal. You can also compare plans and choose better coverage or pricing.