SC no to vehicle insurance cover deadline extension

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New Delhi | Published: September 1, 2018 2:49:40 AM

Buyers of new cars and two-wheelers will have to purchase upfront insurance cover for three and five years, respectively, from Sunday, with the Supreme Court on Friday dismissing a plea by the General Insurance Council.

SC no to vehicle insurance cover deadline extension

Buyers of new cars and two-wheelers will have to purchase upfront insurance cover for three and five years, respectively, from Sunday, with the Supreme Court on Friday dismissing a plea by the General Insurance Council seeking extension in the long-term third party insurance rollout.

A Bench led by justice Madan B Lokur refused to modify its July 20 that had barred automobile companies to sell four-wheelers and two-wheelers without a mandatory third party insurance for a period of two years and five years, respectively, from September 1.

The General Insurance Council, which represents all 25 general insurance companies that operate in the motor vehicle insurance field, said insurance companies can only issue insurance policies for a longer duration of 3 years and 5 years as mandated by the SC, but the compliance and enforcement have to be carried out by the police department or the officer of the motor vehicles department.

Without a similar directions to regional transport authorities to register new vehicles for such duration as prescribed by the SC, insurers cannot force upon vehicle owners an insurance policy for the period of 3 or 5 years, without verifying the proof of vehicle ownership, etc, the council stated.

Seeking modification of its July 20 order, additional solicitor general Tushar Mehta, appearing for GIC, wanted a direction to police officials across the country to ensure valid insurance papers of vehicles plying on roads. Besides, GIC sought a direction to RTOs not to register cars beyond 5 years and two-wheelers beyond 3 years without long-term insurance policy having third party liability insurance as standalone or a comprehensive policy.

However, amicus curie Gaurav Agrawal opposed the GIC’s application saying all the intimations have been given to RTOs and police officials and no change could be made now.

The SC had in July endorsed the suggestion of a committee on road safety, chaired by former apex court judge KS Radhakrishnan, that had asked Irdai to offer a mandatory three-year policy for cars and a five-year policy for two-wheelers at the time of sale and registration.

The long-term policy for three years for car and five years for two-wheelers will be offered only for third party insurance and not for the comprehensive cover. Driving any vehicle without third-party (TP) insurance is an offence and attracts a fine of up to Rs 1,000 with a possible jail term of three months.

According to sources, only 6.5-7 crore vehicles have insurance cover, against approximately 18 crore registered vehicles. Almost 50% of vehicles plying on roads have no valid insurance and a large share of them were two-wheelers.

The order had come on a PIL filed by Coimbatore-based orthopaedician S Rajaseekharan, who sought a direction to all states and Union Territories to frame a road safety policy and the setting up of a lead agency to work as secretariats of state road safety councils to coordinate on activities such as licensing issues, registration of vehicles, road safety and features of vehicles.

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