No insurance pay fine Rs 1,000 or can be send to prison for three months.

To make sure that all vehicles plying on road are insured, the road transport and highways ministry has written to all state governments that if anyone is caught driving uninsured vehicle he/she should be fined Rs 1,000 or can be send to prison for three months.

The Motor Vehicles act, 1988, has mandated that every vehicle should be insured against third-party risk.

It had come in the notice of ministry that not withstanding the provision of MV act, large number of vehicles is being used in public place without being insured against third party risk.

Third-party insurance ensures that compensation is available in respect of injury to people, including one’s passengers, or damage to people’s property from an accident caused by one.

The move follows the ministry’s recent initiative to provide cashless treatment to accident victims for the first 48 hours. Under the scheme the errant vehicles insurance policy will fund the victim’s treatment.

The ministry is also planning to build a solatium fund, which it had proposed in an amendment to the motor vehicle act tabled in the last parliament session.

The amendment has suggested that a fixed amount from the third-party premium be set aside towards a solatium fund. This fund will be used in hit-and-run cases where the errant vehicle cannot be traced.

The ministry has proposed that Rs 1 lakh will be given to the next of kin in hit-and-run deaths and Rs 50,000 in case of grievous injury, with the provision to increase the amount every three years.

In 2011, around 1.34 lakh people were killed and 6 lakh were injured in road accidents. At present there is no time limit for claiming damages on errant vehicles.

Victims file for claims even years after the accident and there have been cases where consumer courts pass orders giving victims extremely high settlement amounts. In all such cases, now insurance is necessary to settle claims.

Ministry is creating a national register that will have data about all registered vehicles. It will also have details of vehicles that do not have any insurance.