What does the Motor Vehicles Act say?
Chapter 11 (Section 145 to Section 164) of The Motor Vehicles Act, 1988, (as amended up to date) provides for compulsory third-party insurance (which is required to be taken by every vehicle owner) for covering third-party liability (without which the newly purchased car would not be delivered to you from the showroom). However, the Act does not specify covering the car with additional insurance benefits or going for a comprehensive package policy – these have been made optional and are at the discretion of the car owner. Many vehicle owners still have the wrong notion that one need to therefore cover only thirdparty liability by paying cheap premium. Since transport is a State subject, each State (through the State Transport Department) has notified Motor Vehicle Rules that are applicable to those cars which are registered with the respective regional transport authority (RTA) of that State. So the State Rules are to be read along with Motor Vehicles Act provisions for guidance.