Mumbai: Madras High Court has demanded five-year bumper-to-bumper insurance mandatory for new vehicles with the effect of September 1, 2021 in delay after the petition submitted by the General Insurance Council.
The court has posted a case to hear on September 13 for all interested parties.
In its application, the GI Board has been seeking clarification on the term ‘bumper-to-bumper’ because it is not the standard definition of industry.
It is not clear whether the court refers to the package cover including third parties and damage itself.
This industry also wants clarification in the class of vehicles where orders will apply.
“The order was issued in a response to a case involving a private car.
It is not clear whether the intention is to cover all vehicles or just a car,” said an industrial official.
Advice for the industrial body also said that there were a number of interested parties in the order, such as the regulatory authorities and the development of Indian insurance, whose views needed to be taken.
According to non-life industrial officials, there is no reason for them to oppose orders because it will increase demand for comprehensive insurance.
However, the challenge is in implementation.
Even now, the country’s authority found it a challenge to ensure that all vehicles buy third-party insurance mandated.
In its order, Madras High Court has placed the responsibility of implementation in the State Transport Department.
However, countries have not succeeded in ensuring compliance with third party cover.
Some industrial officials feel that compulsory compulsory insurance may not be a way out to enforce social obligations.
“It would be much simpler to declare vehicle residents, besides the driver, as a third party and covered it under third party insurance,” said an industrial source.
He added that this would make them eligible to make unlimited claims under the third party cover.
Although this will increase the claim ratio, premiums can be adjusted so that the company does not bleed.