New Delhi, July 21: Those purchasing four wheelers and two wheelers from September 1 2018 onwards will have to cough up three and five years premium respectively for third party insurance upfront.
The Supreme Court on Friday ordered that no new vehicle will be sold without the mandatory third party insurance cover for the prescribed period. Currently only one year third party insurance cover is required to be purchased and it is renewed annually. It's an offence to ply any vehicle without valid third-party insurance.
Since the SC order is only on third-party insurance, owners will have the option of renewing the comprehensive insurance cover annually.
A bench of Justices Madan B Lokur and Deepak Gupta accepted the recommendations of the SC-appointed committee on road safety for mandatory insurance cover for the extended period as most vehicle owners do not renew their insurance cover after the first year, leaving road accident victims vulnerable as they are deprived of compensation.
Amicus Curiae, Gaurav Agarwal, told the Bench that poor compliance of third party insurance of vehicles puts all road users at risk and making a three-year insurance policy for cars and a five-year policy for two-wheelers at the time of sale would be very beneficial.
Only 6 crore of the 18 crore registered vehicle are insured, he said. The Bench directed the IRDA to take necessary steps to comply with the order. IRDA said it was ready to provide third-party insurance for the extended period but pleaded the court not to make it mandatory. The bench, however, rejected its contention and asked it to take the necessary steps to implement its order.