Team Herald

PANJIM: From this month, buyers of new cars and two-wheelers are mandated to purchase upfront insurance cover for three years and five years respectively. The implementation in the State is being monitored by the Transport Department, even as the order is applicable across the nation.

The notification instructing the States to implement the new direction comes after the Supreme Court in July directed the third party insurance cover for new cars and two wheelers should mandatorily be for three years and five years respectively. Long-term premium payments would raise the initial payment on new vehicles but at the same time, it will save consumers of making yearly renewals.

The order applies to all policies sold from September 1 and SC directed insurers to offer long-term, third-party covers because of lower penetration although insurance is mandatory for vehicles.

The Supreme Court’s committee on road safety had observed that out of 18 crore vehicles plying on the roads, only six crore have the mandatory third party cover. “In other words, 66 per cent vehicles are running on the road without 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 findings read as, which was incorporated in the order pronounced on July 20 this year. 

The order thus backed the recommendation for the new insurance scheme stating that ‘this must be taken and treated as a separate product.’ 

“We leave it to the insurance companies to deal with comprehensive insurance policies on a separate footing and it would be an option for 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 on the policies sold,” the order further states. The legal team from Goa was headed by assistant solicitor general of India Atmaram Nadkarni.