Prelims: Current events of national and international importance | Polity and Governance
Why in News?
Recently, Supreme Court of India extended the mandatory third‑party insurance cover for new vehicles by one year, strengthening consumer protection and road safety compliance.
The Motor Vehicles Act, 1988 – India’s principal law regulating road transport, vehicle registration, and traffic rules.
Key Features
- Extension – SC directed that new vehicles must now carry 1 additional year of third‑party insurance cover i.e. 4 years for cars and 6 years for 2-wheelers.
- Objective – Ensure uninterrupted coverage, reduce lapses in renewals, and enhance victim protection.
- Four-tier insurance policy –
- Compulsory third-party insurance.
- Optional coverage for passengers or pillion riders.
- Personal accident covers for death or permanent disability of the owner, driver and other occupants.
- Cover against loss or damage to the insured vehicle itself.
- Road Safety – India records high accident rates; many victims face delays in compensation due to expired policies.
- Consumer Protection – Longer coverage period reduces risk of uninsured vehicles on roads.
Court’s Proposal
- Directive – Court asked IRDAI and Transport Ministry to link fuel purchase with vehicle insurance status.
- Implementation – Vehicles without valid insurance may be denied fuel at petrol pumps using ANPR cameras.
- Benefit – Helps identify uninsured vehicles and compels owners to maintain valid insurance.
Background
- Third‑Party Insurance – It is a policy that protects policy holder from financial and legal liability, if his/her vehicle or actions cause injury, death, or property damage to the 3rd party .
- It is Mandatory under the Motor Vehicles Act, 1988.
1st party is the policyholder who buys the insurance; 2nd party is the insurance company; 3rd party is the injured or affected person.
- Earlier Rule – New vehicles required 3‑year cover for cars and five‑year cover for two‑wheelers.
Reference
The Hindu | Third party Insurance
