Third-party insurance for cars to be compulsory from September 1

On Friday, the Supreme Court of India has passed a judgment regard of the third-party insurance, in which, after September 1, 2018, it is compulsory for every new four-wheeler and two-wheeler to buy the insurance. 

A meeting was held by the Supreme Court Committee on Road Safety on March 26, 2018. Advocate Gaurav Agarwal, who is assisting the court in the matter, said the panel forwarded the suggestion after it was found that There were about 18 crore vehicles plying on the road and only about six crore vehicles had the mandatory third-party insurance cover. It means that 66 percent of vehicles were running without any third-party insurance cover. The victims of accidents – including those who have died and their legal representatives, as a result, were not getting compensation because vehicles were not insured.

“50% of the uninsured vehicles are two-wheelers and statistics also reflect that maximum number of accidents are caused by these.” Said the advocate Gaurav Agarwal.

The bench also directed Development Authority and Insurance Regulatory to approve the insurance product when it receives from the General Insurance Council. The directive came after a court-appointed panel on road safety, headed by former SC judge justice KS Radhakrishnan, suggested having a long-term third party insurance.

66 percent of vehicles were running without any third-party insurance cover

To find the answer for the problem, particularly by persons who are legal representatives of victims of fatal road accidents, the Committee had detailed discussions with General Insurance Council, Insurance Regulatory and Development Authority (IRDA), Ministry of Road Transport and Highways, Ministry of Finance, Department of Financial Services, and the government of India.

After this detailed discussion, the Supreme Court has confirmed that people buying new four and two-wheel vehicles will have to cough up three and five years’ premium, respectively, for third-party insurance upfront. This may be taken and treated as a separate product. It has been left to the insurance companies to deal with comprehensive insurance policies on a separate footing. It would be at the option of the owner of the vehicle to decide which specific policy should be taken.

In addition, the bench also agreed on the point that it is a must for the road safety panel to submit a report of the compensation giving to people who are killed in accidents caused due to potholes on roads. Justice Lokur said

“This is frightening and a very serious issue. People who have lost their lives as a result of accidents caused due to potholes should be entitled to compensation. After all, it happens due to the negligence of civic authorities,”