After making Pollution Under Control (PUC) certificate mandatory for the motor insurance policy THE Supreme Court on Friday has said automobile companies in the country cannot sell four-wheelers and two-wheelers without a mandatory third party insurance for a period of two years and five years respectively.
In view of unsatisfactory third-party insurance offered to vehicles, the Supreme Court Committee on Road Safety has asked the Insurance Regulatory and Development Authority of India (IRDAI) to offer a mandatory three-year policy for cars and a five-year policy for motorbikes at the time of sale and registration.
The long-term policy for three years for car and five years for two-wheelers will be offered only for third party insurance and not for the comprehensive cover.
Currently, maximum one-year comprehensive policy for car and three years comprehensive policy for two-wheelers can be offered by insurers.
The apex court also directed the Road Safety Panel to look at developing some form of compensation mechanism for next of kin of pothole victims.
The general insurers have welcomed the move.
“We are waiting for the copy of the SC judgement and the industry will work with the regulator to implement the SC directive,'' said R Chandrasekhran, secretary general. General Insurnac Council..
`As it is a third party product, we will wait for the new rates from the IRDA . As SC has mandated it , it will done faster,’’ said Rakesh Jain, ED & CEO, Reliance General Insurance .
Amicus Curiae Gaurav Agarwal said that the third party insurance is provided when bikes or cars are brought for the first time. But they are not carried over the following year. There are some 66 percent vehicles which don't have third party insurance.
Insurance companies contended that it was not possible to take third party insurance sum for 20 years at one go. Later a SC committee referred that third party car insurance can be extended for three years and five years for two wheelers or motorcycles.
The Central government on the other hand contended that people are usually not keen to take third party insurance because it pushes up the insurance premium of their vehicles