Make Third-Party Car Insurance Mandatory For Three Years: SC To IRDA
Saar: The ruling is expected to come into effect from September 2018.
Okay. The title may sound a bit confusing. Apologies for that. But allow us to enlighten you lot on what’s cooking on the third-party car insurance front. The Supreme Court (SC) of India has directly IRDA (Insurance Regulatory and Development Authority) to make third-party car insurance mandatory for a period of three years. In other words, instead of a yearly renewal of car insurance policies, they will be renewed of bought new with a validity of three years.
To this, the IRDA responded by saying that the third-party insurance should not be made mandatory. It will take around eight months to decide on how to curb the problem of increased deaths on roads, where most of the cars are not insured.
The apex court’s bench responded by saying that:
“You are looking at it from the point of insurance companies. Now, there are people who are dying and there are people who have already died in road accidents. Number of deaths in road accidents is more than one lakh per year in India. Three people are dying per minute in road accidents.”
The SC further added that IRDA needs to look at this proposal from a human point of view. It has directed the insurance regulatory body to implement the proposal within a reasonable time limit. The last date set for IRDA is September 1, 2018.
A report, which was submitted by a committee headed by former SC judge Justice K S Radhakrishnan, read that around 18 crore vehicles ply on the roads of the country. Out of that lot, only six crores have valid insurance covers. That’s just 33 per cent.
In June this year, IRDA itself proposed to design four-year insurance policies for four-wheelers. According to its own numbers, IRDA said that around 50 per cent of vehicles on the road are uninsured. The insurance regulatory body said the idea behind a longer-term insurance policy is to ensure most of the people are covered most of the time.
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