Punjab State Transport Department has issued a notification under which owners of cars involved in fatal accidents will have to furnish "sufficient security" or the third-party insurance document. Failure to fulfill either of the two conditions will result in the vehicle being auctioned in three months. The notification that came on 3 April states that if the owner of a car, involved in an accident resulting in death or injury or property damage, fails to produce the third-party insurance document, the vehicle will be sold off in a public auction by the magistrate of the area.
The notification further states that the proceedings from the auction will be used as compensation for the accident victim. The notification of the Transport Department has come into force on April 8 after its publication in the Official Gazette.
The Supreme Court had directed all states to frame rules on 13 September 2018 allowing the sale of vehicles involved in accidents without third-party insurance to pay compensation to the victims. The apex court had ordered states to frame the rules within 12 weeks but the state of Punjab has now made the notification public after 8 months.
In March this year, as a relief to motor insurance holders, the Insurance Regulatory Authority of India (IRDAI) has put the expected increase in annual premium for Third Party (TP) policies on hold until further orders.
As per the IRDAI circular, the insurance regulator made it clear that the insurers will continue to charge the current rate of premium for Motor Third Party Liability Insurance from April 1, 2019.