The government is discussing a plan that includes deducting the premium from the owner’s Fastag account for on-the-spot insurance coverage for uninsured vehicles operating on highways. The alarming increase in uninsured vehicles, which comprise an estimated 40–50% of all cars in India, has changed how vehicle insurance is handled.
Two people with knowledge of the development claim that the Center is debating a system requiring motor vehicle owners to have third-party insurance coverage when their uninsured vehicles are seized by traffic police or transport department representatives.
The costs of medical care and treatment for accident victims are covered by third-party insurance.
The hand-held devices with police and transport department officials would not only check the insurance status of vehicles using the Vahan app developed by the road and highway ministry but also provide instant third-party auto insurance options with pertinent policies of general insurers connected with the transport department’s network.
Insurance companies could be brought to the Fastag platform along with banks for instant payment of premiums for on-the-spot policies, with the premium deducted from Fastag’s balance. Spot insurance was also discussed in a meeting of the General Insurance Council (GIC), according to a GIC official. Recommendations for its implementation are being developed. GIC is a non-life insurance industry organisation that directs governmental policy.
The cost of third-party insurance varies depending on the size and age of the vehicle, ranging from 2,072 for passenger vehicles with 1000cc engines to 3,221 for those with 1000–1500cc engines and 7,890 for those with engines larger than 1,500cc.[1
The spokespeople for the finance, road transportation, and GIC ministries had yet to respond to inquiries. According to officials from various ministries, the proposal would soon move forward, and state governments would also be involved to fully integrate the insurance, transportation, and judicial sectors to achieve the larger objective of making Indian roads safer.
The insurance industry’s regulatory body, IRDAI, has already permitted insurance companies to provide short-term or temporary vehicle insurance for seized vehicles. According to another official who wished to remain anonymous, once systems are linked for product delivery, this could be replaced by a comprehensive third-party cover for the uninsured.
Legal implications of the proposed changes are being investigated, and if necessary, the Motor Vehicles Act and insurance regulations could be changed to permit the idea’s implementation.
Road safety is still a significant problem in India, even as it begins a plan to build a network of highways and expressways for quick movement of people and goods. It is a developmental issue, a public health concern, and a significant cause of passing away and injury.
According to the World Health Organization, at least one in ten people killed on the road worldwide are from India. This action will decrease road fatalities in India by ensuring immediate financial support for accident victims. A vehicle insurance calculator is a convenient tool you can utilise online to check the coverage required based on your needs.
Visit the official website of IRDAI for further details.
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