Order directing bumper-to-bumper insurance for new vehicles withdrawn

Justice S Vaidyanathan, who passed the order on August 4, withdrew it based on submissions by Insurance Regulatory and Development Authority (IRDAI), General Insurance Council (GIC) and Society of Indian Automobile Manufacturers (SIAM) that the order could have unintended impact.

They submitted that long-term, third-party insurance coverage was mandated by the Supreme Court in September, 2018, and that IRDAI has been monitoring the changing scenario. Hence, there was no need for such compulsory directions.

It was also submitted that the views expressed by the court on protective coverage to uninsured victims, such as occupants in a private car or pillion riders, would be taken care in consultation with IRDAI to safeguard their interest.

“Considering the overall submissions made by the parties, this court feels that the direction issued by this court may not be conducive and suitable for implementation in the current situation. Therefore, the said direction in paragraph no.13 is hereby withdrawn for the present,” said the judge. The court also cancelled the circular issued by the Joint Transport Commissioner, Chennai, on August 31, directing adherence to the order.

It expressed hope that lawmakers would look into the aspect and examine the need for suitable amendment in the Act relating to wide coverage of vehicles so as to protect innocent victims.