New rules for third party insurance of vehicles.

The Ministry of Road Transport and Highways on 29thAugust, 2018 vide letter No. RT-1103/01/2017-MVL notified that insurance cover for new cars shall be 3 years and for new two wheelers, it shall be 5 years mandatorily. This notification came in the wake of The Hon’ble Supreme Court’s order  dated 20thJuly, 2018 in the matter of S Rajaseekaran v. Union of India and Ors (WP(C) No. 295/2012). In its order, the Hon’ble Apex Court directed that the third party insurance cover for new cars and two wheelers should mandatorily be for a period of 3 years and 5 years respectively. It was further held that this may be taken and treated as a separate product. Furthermore, it was held that it is on the insurance companies to deal with comprehensive insurance policies on a separate footing and it shall be the option of the owner of the vehicle to decide which policy is to be taken except that the third party insurance is mandatory.  This decision shall be implemented from 1stSeptember 2018.

The relevant paragraph has been reproduced for perusal:

“We make it clear 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. This may 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 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 1stSeptember 2018 on the policies sold.”

Copy of notification and judgement: Insurance period of vehicles

-Tushar Kaushik

 

Leave a Reply

Your email address will not be published. Required fields are marked *