Madras HC withdraws its order to provide bumper-to-bumper insurance policy for new vehicles

The court was told that its direction would have an unintended impact, causing severe repercussions to society; Justice S. Vaidyanathan said it was hoped law makers would look into this issue

The Madras High Court has withdrawn an order passed by it last month directing the State government to ensure that all new motor vehicles get bumper-to-bumper insurance cover along with coverage for the driver, owner, passengers and third parties for a period of five years.

Justice S. Vaidyanathan withdrew his order after the Insurance Development Regulatory Authority (IRDA), General Insurance Council (GIC) and Society of Indian Automobile Manufacturers (SIAM) said it might not be logistically and economically feasible for effective implementation in the present legal dispensation.

The court was told that its direction would have an unintended impact, causing severe repercussions to society and therefore it must be withdrawn in the interest of policyholders, the automobile industry and the public at large.

It was brought to the notice of the court that the issue of long-term third-party insurance coverage had been mandated by the Supreme Court as early as September 2018 and IRDAI had been periodically monitoring the changing scenario from time to time and hence, there was no need for issuance of such directions.

Counsel M.B. Raghavan, V. Arun Kumar and N. Vijayaraghavan representing IRDAI, GIC & SIAM respectively told the court that the anxiety expressed by the court with respect to protective coverage to uninsured innocent victims, such as gratuitous occupants in a private car and pillion riders would be duly taken care of.

“Considering the overall submissions… 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 Therefore, the said direction in Paragraph is hereby withdrawn for the present,” the judge wrote.

He also said: “This court hopes and trusts that law makers will look into this aspect and examine the need for suitable amendment in the Motor Vehicles Act relating to wide coverage of vehicles so as to protect the innocent victims. In view of withdrawal of the direction regarding bumper-to-bumper policy, the circular dated August 31, 2021 issued by the Joint Transport Commissioner, Chennai also stands cancelled.”

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