Registration of new cars may come to a screeching halt on Wednesday in Tamil Nadu with the state Transport Department directing Regional Transport Officers (RTO) and others to ensure the vehicles are covered under bumper-to-bumper insurance for five years. The Transport Department has also directed the vehicle registering authorities to ensure that the owner, driver, and passengers are also covered under accident insurance.
It issued the directive to comply with the recent Madras High Court order. Is there any such policy is the moot question? Non-insurance industry officials told IANS that none of the insurers have a five year bumper-to-bumper insurance policy for cars and two-wheelers.
Such a product has to be designed after doing actuarial calculations.
“The IRDAI (Insurance Regulatory and Development Authority of India) has to approve such a product first. There is no five-year bumper-to-bumper car vehicle insurance policy," Federation of Automobile Dealers Associations (FADA) CEO Saharsh Damani told IANS.
The Madras High Court ruled on Thursday that ‘bumper-to-bumper’ insurance was to be made mandatory for a new vehicle whenever it is sold. This is set to come into effect from September 1. The court stated that this should be in addition to the coverage of the driver, passengers and the owner of the vehicle for a period extending up to five years. After that period, the owner of the vehicle must be cautious in safeguarding the safety of the driver, passengers, any third parties as well as themselves.
“This court directs that whenever a new vehicle is sold after September 1, it is mandatory for coverage of bumper-to-bumper insurance every year, in addition to covering the driver, passengers and owner of the vehicle, for a period of five years. Thereafter, the owner of the vehicle must be cautious in safeguarding the interest of driver, passengers, third parties and himself/ herself, so as to avoid unnecessary liability being foisted on the owner of the vehicle, as beyond five years, as on date there is no provision to extend the bumper-to-bumper policy, due to its non-availability," said the Judge.
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The Judge was allowing a writ petition from the New India Assurance Company Limited in Avalpoondurai, which was challenging the orders dated back to December 7, 2019, of the Motor Accidents Claims Tribunal, Special District Court in Erode. The insurance company argued that the insurance policy was only an ‘Act Policy’. This means that the coverage would only extend to the risks to the vehicle by a third party and not the occupants of the vehicle itself.
The passing of this order means that accident victims in Tamil Nadu will have greater coverage on their side. Justice Vaidyanathan also made it clear that this order would not preclude the claimants from claiming compensation for the death of the deceased from the owner of the car.
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