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In an order passed on July 20, the Supreme Court has directed that Third Party Insurance Cover of three years for cars and five years for two-wheelers shall be mandatory with respect to new vehicles sold from September 1.
Such policy shall be sold as a separate product or as part of the comprehensive insurance product.
The directions were passed by a Bench of Justices Madan B Lokur and Deepak Gupta in a 2012 petition by S Rajaseekaran.
The order was passed pursuant to the decisions were taken by the Supreme Court Committee on Road Safety (Committee) constituted by the Court.
In a meeting held by the Committee on March 26, 2018, it was recorded that there are about 18 crore vehicles plying on the road and only about 6 crore vehicles have the mandatory third party cover.
“In other words, 66% vehicles are running on the road without any third party insurance cover and the victims of accidents including those who have died and their legal representatives are not getting compensation because the vehicles are not insured”, the Court observed.
After detailed discussions and taking into consideration the views of all the participants in the meeting, the following decisions were taken by the Committee:
The Supreme Court noted that the above decisions are eminently reasonable and should be implemented.
It, therefore, directed that the third party insurance cover for new cars should mandatorily be for a period of three years and for two-wheelers, it should mandatorily be for a period of five years.
The Court also held that Insurance companies shall deal with comprehensive insurance policies on a separate footing and it would be at the option of the owner of the vehicle to decide which policy should be taken except that the third party insurance is mandatory.
The decision should be implemented from September 1, 2018.
The Court also asked the Committee to look into the issue of potholes on roads and submit a report in this regard.
Read the order below.