Third-party motor insurance is mandatory by law in India. But, according to reports from the Insurance Information Bureau, out of the nearly 18 crore vehicles registered, only 6.5 to 7.0 crore vehicles are plying with insurance coverage. The rest, or nearly 50% of the total are running without any sort of insurance cover.
This is a staggering number, and two wheelers account for bulk of the non-insured vehicles. These vehicles are not only a financial liability to their owners but also a risk to pedestrians or other vehicles who won’t get adequate compensation if an accident were to happen. At present, the fine for driving without third-party insurance is ₹1,000 that can also come with a prison term of 3 months.
Taking cognizance of this grave situation, the Supreme Court Committee on Road Safety has asked insurance regulator IRDAI to make three-year insurance policy for cars and five-year insurance policy for two wheelers mandatory, right at the time of sale and registration.
IRDAI (Insurance Regulatory and Development Authority of India) officials responded by stating that three-year insurance plans for two wheelers were already on offer. The Supreme Court panel replied saying that it needed to be made mandatory as no other option was working.
According to industry experts, the problem of non-compliance can be fixed with proper enforcement. One way of doing this can be by making yearly vehicle registration compulsory, rather than the current 15-year period. This way insurance will also be 100% as insurance is required for registration.
*Source: Times of India
Also Read:
IRDAI Announces Rates For Third-Party Motor Insurance Premiums for 2018-19
ICICI Lombard Upgrading Fraud Detection To Stem Fraudulent Claims