In a significant ruling aimed at enhancing road safety and ensuring timely compensation for accident victims, the Supreme Court of India has mandated an extension of the minimum third-party motor insurance period for all new vehicles. The apex court's directive now requires new cars to carry four years of mandatory third-party insurance, while new two-wheelers must secure six years of coverage at the time of purchase.
This latest order, delivered by a Bench comprising Justices Sanjay Karol and Prashant Kumar Mishra, modifies a 2018 judgment which previously set the compulsory periods at three years for cars and five years for two-wheelers. The court emphasized that the extension was crucial due to the alarmingly high number of uninsured vehicles on Indian roads, which often leaves accident victims and their families struggling for compensation for years.
Tackling Uninsured Vehicles and Enhancing Enforcement
Justice Karol, authoring the judgment, highlighted the severe consequences of uninsured vehicles, stating, "The result of vehicles remaining uninsured is that the victims of the accident and their families have no recourse to adequate compensation, within a reasonable time period." To combat this issue, the Supreme Court has introduced several stringent enforcement measures:
- Real-time Data Linking: Automatic Number Plate Recognition (ANPR) cameras installed on highways and roads will be linked to insurance records maintained by the Insurance Information Bureau of India (IIB) and vehicle registration data on the VAHAN portal.
- Police Empowerment: State police personnel will be equipped with mobile applications connected to the IIB and VAHAN databases, enabling instant verification of a vehicle's insurance status and immediate issuance of challans for non-compliance.
- Proposed Fuel Denial Pilot: The court has instructed the Insurance Regulatory and Development Authority of India (IRDAI), in consultation with the Ministry of Road Transport and Highways, to explore a pilot project. This system could deny fuel purchases to uninsured vehicles at petrol pumps until valid cover is obtained, serving as a dual mechanism to identify and prompt owners to insure their vehicles.
New Four-Tier Insurance Policy Option
In a move to offer broader protection, the Supreme Court also directed that vehicle buyers be presented with a comprehensive four-tier insurance policy option at the time of purchase. This policy structure will include:
- Compulsory third-party insurance.
- Optional cover for passengers or pillion riders.
- Personal accident cover for death or permanent disability of the owner, driver, and other occupants.
- Cover against loss or damage to the insured vehicle.
While IRDAI, in consultation with the Centre, will determine the premium for the mandatory third-party component, insurers will have the flexibility to set premiums for the optional covers. The court has further tasked IRDAI, along with the General Insurance Council (GIC) and insurance companies, with developing uniform terms for these additional policies.
Streamlining Accident Claims Disposal
Acknowledging the substantial backlog of motor accident compensation cases before Motor Accident Claims Tribunals (MACTs), the court issued directions to expedite their resolution. For accidents occurring before March 31, 2022, State police authorities are instructed to promptly file Detailed Accident Reports (DARs) with tribunals, including FIRs, medical and post-mortem reports, insurance documents, and vehicle permits. Additionally, police must ensure timely service of notices and produce relevant witnesses to facilitate quicker case closures.
These directions arose during the Supreme Court's hearing of an appeal filed by an insurance company against a 2024 Telangana High Court judgment. The High Court had ordered the insurer to pay ₹10 lakh in compensation to the family of a road accident victim. The apex court dismissed the appeal, upholding the compensation awarded. The matter is scheduled for further hearing on August 18 to review compliance.