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  1. Motor insurance: You need a PUC certificate to renew insurance

Motor insurance: You need a PUC certificate to renew insurance

After last year’s Supreme Court order, Irdai has now mandated that every vehicle must have a valid PUC certificate on the date of renewal of motor insurance policy

By: | Published: July 11, 2018 3:34 AM
Motor insurance, PUC certificate, Supreme Court, Indian Motor Vehicles Act, PUC centres Experts believe making PUC mandatory for insurance would help check pollution level as third-party insurance of vehicles is mandatory under the law.

The insurance regulator has made it mandatory to show a valid pollution under control (PUC) certificate at the time of renewal of insurance of the vehicle. This was done as per the directions given by the Supreme Court in August last year in the matter of MCMehta vs.Union of India to not insure a vehicle unless it has a valid PUC certificate on the date of renewal of the insurance policy.

Experts believe making PUC mandatory for insurance would help check pollution level as third-party insurance of vehicles is mandatory under the law. Apart from mandatory PUC certificate for renewal of vehicle insurance, a fitness certificate is also mandatory requirement for all valid registered transport vehicles which are over 15 years old. However, analysts say those who do not have PUC certificate at the time of renewal will postpone renewing their insurance.

Pollution control

Concerned over rising vehicular pollution, Supreme Court had last year issued a slew of directions that included non-renewal of insurance policy of vehicles unless the owner provides PUC certificate to the insurance firms. A bench comprising justices Madan B Lokur and Deepak Gupta which heard a PIL filed by environmentalist M C Mehta way back in 1985 dealing with various aspects of pollution underlined that that some fuel refilling outlets in the National Capital Region (NCR) did not have the PUC centres and directed the ministry of road transport and highways to ensure that all fuel refilling centres in NCR have a functional PUC centre.

To enhance the effectiveness of the PUC network, the bench had also stated that all PUC centres should be linked online to a data centre to prevent manual tampering. While a new vehicle will come with a PUC cover for six months, one needs to then go to a outlet to get the certificate for one year. Vehicles up to five years old will get a one-year PUC certificate.

Vehicle insurance

Any motorised vehicle plying on Indian roads will to have a third-party insurance cover mandated by the Indian Motor Vehicles Act. The penalty for driving a vehicle without insurance is Rs 2,000.Insurers will have to ensure that the policy is available at each underwriting office. The pricing of third-party insurance is decided every year by Insurance Regulatory and Development Authority of India (Irdai).

Third-party liability is decided and awarded by the judiciary taking into account the age of deceased, earning capacity, wages, etc., which keep rising due to inflation and other factors. The Motor Vehicles (Amendment) Act has substantially increased compensation for accident victims.

The insurance regulator had recently mooted the idea of long-term third-party insurance—five years for two-wheelers and three years for four-wheelers. It underlined that half of the vehicles plying on the roads are uninsured despite the third-party insurance being mandatory.

Comprehensive cover

Policyholders should look at a comprehensive cover which takes care of the own damage portion, especially loss or damage due to fire, explosion, accidents or while in transit by road or rail, and even burglary and theft. Riders which are optional add-on covers can protect from those things which are excluded from the basic cover. One can take add-on covers to the basic vehicle insurance and the pricing is based on the Insured Declared Value.

In zero or nil depreciation cover, the policyholder gets full claim on the value of parts such as plastic items, fibre, rubber, windscreen that are replaced in the event of loss due to accident. One should take a zero depreciation add-on cover for a new vehicle and renew it for up to five years along with comprehensive motor insurance plan.

Engine cover rider provides protection to the engine in case of flooding as hydro-static lock is a major cause of engine failure. Since damage due to hydrostatic lock, which happens if one repeatedly tries to run a moist engine, is not covered under a regular motor insurance policy, an add-on engine cover can be of great help. At a nominal cost, break-down assistance add-on cover will help policyholders to get instant assistance in case of breakdown or accident on the road.

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