By Amit Chhabra
Picture this: two drivers pull up to adjacent petrol pumps. Even before the nozzle lifts, a digital check instantly greenlights the first driver’s fully insured car for a refuel. But for the second driver, whose third-party policy lapsed last night, the transaction is halted until the policy is renewed. While both drive away, now the road is safer for everyone. While this might not be the reality yet, broadly, this is the model that the Supreme Court has asked the authorities to explore through a pilot project.
MoRTH data puts the human cost at 1.77 lakh road deaths in 2024, or about 20 lives an hour, and two-wheeler riders alone accounted for nearly half of them. Yet, the Supreme Court noted that nearly 56% of vehicles plying on Indian roads remain uninsured. Together, those two numbers explain why accident victims can end up facing years of litigation to secure compensation that mandatory third-party insurance was designed to facilitate.
The Court’s directive addresses this on two fronts. Primarily, how insurance gets verified, and then, how long it lasts before a driver has to think about it again.
Tech stack and DPI behind the pump
With the directive, India’s next phase of Digital Public Infrastructure might just be coming to life. To make this mechanism functional, the Court has proposed ANPR cameras already deployed on highways and roads to be integrated with the Insurance Information Bureau and VAHAN to identify uninsured vehicles and enable automatic e-challans. Separately, it has asked IRDAI and MoRTH to evolve a pilot linking fuel dispensing with valid insurance status, potentially using ANPR cameras.
Addressing India’s renewal lapse with longer-term coverage
Data shows that it’s common for consumers to lag behind on their coverage once the initial upfront coverage period is over. Subsequent renewals tend to fall off the priority list unless legally mandated. This is especially true for two-wheeler owners, who can drive for years without encountering a manual police checkpoint. But for accident victims, this means compensation being delayed due to the lack of an active insurance policy.
By extending upfront third-party coverage to four years for new private cars and six years for new two-wheelers, the directive pushes the risk window further out. However, when paired with fuel-pump verification or e-challan integration, it completely flips the behavioural dynamic. Instead of expecting consumers to remember a distant renewal date, daily mobility itself is bound to policy validity.
Motor insurance as India’s next digital public good
Motor insurance has long been treated as a static legal mandate rather than active protection, which left millions of commuters exposed. Tying verification to daily mobility changes that.
It is worth noting that this transition also marks an important next step of India’s ongoing digital public infrastructure journey. Just as unified payment systems and digital tech stack formalised financial inclusion and access, this tech integration formalises public safety on roads. UPI’s success was not simply about digitising payments. its interoperability across every participating bank was what drove its scale. A decade on, that architecture handles over 24,000 crore transactions a year across more than 700 banks.
The “no insurance, no fuel” mechanism is once again set to demonstrate how technology can enforce accountability coherently. That said, this starts as a pilot as of now and not an immediate switch. When this hits the ground in a country as diverse as India, there will be newer challenges to address. For instance, a huge number of two-wheeler users belong to the gig economy and we still have to figure out how this change will pan out for them. So, as it is with any major transition, its effectiveness will hugely depend on its execution by the industry and consumers alike.
The author is chief business officer, Policybazaar
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.