New Vehicle? Mandatory Insurance Cover Gets Longer
The Supreme Court has extended compulsory third-party insurance for new vehicles. This means higher upfront insurance costs when you buy a new car or bike, but also longer protection without annual renewal stress.
A 5-year two-wheeler TP premium can cost more than 6 months of your morning chai budget — paid in one shot at the showroom.
Your new car or bike insurance coverage period is getting longer — and costlier upfront
Key Takeaways
Factor the full multi-year third-party premium into your on-road price calculation before visiting the showroom — ask the dealer for an itemised insurance breakup in writing.
Separately compare own-damage insurance quotes online from IRDAI-regulated insurers rather than accepting the showroom's bundled policy, which may be overpriced or loaded with unnecessary add-ons.
Check whether your existing vehicle's third-party policy is still active — if you bought a vehicle before the long-tenure rule applied, you must renew TP annually and a lapse makes you legally liable on the road.
The Supreme Court has extended compulsory third-party insurance for new vehicles. This means higher upfront insurance costs when you buy a new car or bike, but also longer protection without annual renewal stress.
Here's what happened: The Supreme Court has directed that new vehicles must carry extended mandatory third-party insurance — up to 3 years for cars and 5 years for two-wheelers — bundled at the time of purchase.. This ruling builds on an earlier Supreme Court direction from 2018 and is aimed at reducing the large number of uninsured vehicles on Indian roads, which leaves accident victims without compensation.. Insurers must now clearly disclose and explain optional covers such as own-damage, zero-depreciation, and roadside assistance, so buyers can make informed decisions rather than being auto-enrolled into add-ons they don't understand..
What you should do: Factor the full multi-year third-party premium into your on-road price calculation before visiting the showroom — ask the dealer for an itemised insurance breakup in writing.. Separately compare own-damage insurance quotes online from IRDAI-regulated insurers rather than accepting the showroom's bundled policy, which may be overpriced or loaded with unnecessary add-ons.. Check whether your existing vehicle's third-party policy is still active — if you bought a vehicle before the long-tenure rule applied, you must renew TP annually and a lapse makes you legally liable on the road..
Third-party insurance premium rates are fixed by IRDAI — no insurer can charge you more or less. If the showroom quotes a higher TP figure, they are likely bundling undisclosed add-ons into the price.
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- [1]“New cars and bikes may cost more as Supreme Court extends mandatory insurance cover” Personal Finance News in CNBCTV18, Personal Finance Latest News, Personal Finance News · 4 Aug 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.