Supreme Court Extends Third-Party Insurance for New Cars to Four Years

The Supreme Court has extended the mandatory third-party (TP) insurance period for new private cars from three years to four years, while for new two-wheelers the tenure has been increased from five years to six years. This move comes amid concerns over the large number of uninsured vehicles on Indian roads as well as the need to ensure that accident victims have access to compensation.Read more

What Has the Supreme Court Ordered?

Under the direction, which was issued on August 4, 2026, the Court has asked the IRDAI (Insurance Regulatory and Development Authority of India) to implement the revised third-party insurance tenure, which is as follows:

Why Has the Court Extended the Car Insurance Period?

Third-party insurance is mandatory for all cars being used on public roads in India. It covers the policyholder's legal liability for injury, death or property damage caused to a third party in an accident. The Supreme Court has raised concerns about the large number of vehicles being driven without valid insurance. Reports on the order indicate that the Court noted that around 56% of vehicles may be uninsured.

This directive aims to improve car insurance compliance and provide better protection to road accident victims. A longer mandatory TP insurance tenure could also reduce the risk of new car owners letting their coverage expire soon after buying a new car.

What Does the 4-Year Third-Party Insurance Rule Mean for New Car Buyers?

For buyers purchasing a new private car, the 4-year mandatory third-party insurance means their liabilities towards other individuals on the road are covered for a longer period. And that they will not need to renew the TP component of their car insurance during the initial four-year term.

Does the Four-Year Rule Cover Damage to Your Own Car?

No. The Supreme Court's direction concerns only the mandatory third-party insurance component. A new car owner who wants financial protection against loss or damage to their own vehicle needs an own-damage or comprehensive car insurance policy.

This type of car insurance can help protect the insured car owners against risks such as accidents, theft, fire and natural calamities, subject to policy terms and conditions. Therefore, when choosing a policy, new car buyers should distinguish between mandatory third-party insurance and own-damage coverage.

The 'No Insurance, No Fuel' Rule

The Supreme Court has also directed the Centre to prepare a pilot project based on the principle of 'No Insurance, No Fuel.' Under this rule, vehicles without valid third-party insurance could potentially be denied fuel at petrol stations.

The Court has also discussed the use of Automatic Number Plate Recognition (ANPR) technology and the integration of vehicle and insurance databases to identify uninsured vehicles. However, this initiative is a proposed pilot project. It should not be understood as an immediate nationwide ban on fuel sales to uninsured vehicles.

Read the full story: No Insurance, No Fuel

What Should New Car Buyers Do?

Despite the extended third-party insurance period, new car buyers should still check the exact coverage and policy tenure before taking delivery of a new car. Here is a simple checklist to follow:

• Check that the third-party insurance is valid for the mandatory four-year period
• Understand whether the policy also includes own-damage coverage
• Check the policy start and expiry dates
• Before purchasing a policy, compare car insurance online from multiple insurers and check coverage, premium and applicable terms
• Keep the policy documents and vehicle details updated