CHENNAI: If you are buying a new vehicle after September 1, you may have to purchase bumper-to-bumper insurance which covers a wide range of liabilities. The Madras High Court in an order dated August 4 has ruled thus.
Currently, any type of insurance is sufficient to run a vehicle on the roads. Most of the vehicle owners opt for the cheapest option which covers liabilities of only those who suffer damages out of an accident involving the vehicle. The Madras high court has ruled that a comprehensive insurance policy, covering even all the parts of the vehicle and the vehicle owner is a must.
Such a policy will obviously be costly and it remains to be seen whether the state government will choose to enforce the order or appeal against it.
Justice N Vaidyanathan in his order said, "...this Court directs that whenever a new vehicle is sold after 1 September, 2021, it is mandatory for coverage of bumper to bumper insurance every year, in addition to covering the driver, passengers and owner of the vehicle, for a period of five years."
The original case the single-member bench was hearing related to a challenge by an insurance firm against a Rs 14.65 lakh compensation to a road accident victim awarded by the Motor Accidents Claims Tribunal, Erode. In the case, the court ruled that the insurance company of the car involved in the accident is not liable to pay the compensation to the victim. However, it said the owner of the vehicle can be held liable to pay the compensation.
In this context, the court advised vehicle owners to have comprehensive insurance policy covering the vehicle, driver, passengers and owner so that they could be spared from being liable to pay compensation in case of mishaps.
The judge observed, "It is saddening to point out that when a vehicle is sold, the purchaser/buyer is not clearly informed about the terms of policy and its importance and buyer is also not interested in thoroughly understanding the terms and conditions of the policy as he/she is more concerned about the vehicle’ performance and not about the police."
The judge expressed shock as to why the buyers are not interested in spending "a paltry sum" to take a policy when he is ready to pay a huge amount for purchasing the vehicle.
He also instructed the Additional Chief Secretary of the state transport department to circulate the order to all insurance firms and ensure it is followed scrupulously in letter and spirit.