Team-BHP - SC: Long-term 3rd party insurance a must for cars & bikes at the time of delivery

Yet another ruling from the SC that is beyond their expertise or scope. Have they bothered to check the efficacy of third-party insurance? I haven't come across one person who has claimed third-party insurance.

How about the SC first rap law enforcement, judiciary and insurance companies for not making third-party claims easy and relevant; then we can talk about this decision.

Also, since they have made it their business, hope they've laid the framework for what happens when one sells the vehicle before this period. Refund/transfer?

I thought it was illegal in the first place to drive a car without 3rd Party insurance. If anyone's doing so, it's a failure on part of the enforcement (Police).

Why should I be forced to take 5 years policy when I buy a car ? Can I take it from any vendor or from the 'preferred' vendor of the dealer? What happens if I want to change my insurance vendor after an year if someone's of offering a lower quote? In the event of switching vendors how shall the already paid up 3rd party insurance amount be adjusted?

To me it looks like a clear case of taking the easy way out and putting the burden on the soft target instead of fixing the core problem - enforcement.

Quote:

Originally Posted by libranof1987 (Post 4431974)

+1, Off-late the SC is turning out to act like an elected government of India.

I am wondering is this trend because the ruling government is failing to address necessary issues or is the SC going beyond its judiciary powers and taking up suo moto stuff rather than focussing on clearing the piled list of important cases?

The Supreme Court of India has asked the Insurance Regulatory Development Authority of India (IRDAI) to offer 3-year and 5-year insurance policies for cars and 2-wheelers respectively. These will be mandatory and will be offered at the time of sale and registration.

SC: Long-term 3rd party insurance a must for cars & bikes at the time of delivery-insurance2.jpg

According to a media report, IRDAI representatives have told the Supreme Court panel that it had allowed 3-year insurance plans for 2-wheelers. However, the panel said that instead of offering long-term policies as an option, they should be made compulsory. In May 2018, it was reported that the IRDAI had asked insurance companies to formulate long-term third party policies for cars and 2-wheelers.

Reports suggest that out of 18 crore vehicles plying on the roads in India, only 6.5-7 crore vehicles have a valid insurance. It is said that almost 50% of the vehicles playing on Indian roads don't have a valid insurance, with a majority of them being 2-wheelers.

Source: Economic Times

Link to Team-BHP News

While this move would increase compliance, won't this be too heavy on new car buyers's wallet ?

for example in today's scenerio lets assume for a new car Insurance @ 1st year : INR 30000

with this new rule, we are looking @ perhaps INR 80,000 !

Considering that majority of the new cars are taken on loan and the insurance amount is usually not included in the loan, this might be slightly hesitating for the customers.

Quote:

Originally Posted by vaasscit (Post 4432679)

Not quite. Only the third party insurance needs to be bought for 3 years. This ranges from 2000 to~7900 depending on the CC of the vehicles. But it will still mean an additional 6k to 24k upfront.

Im wondering how will this be implemented. Annual insurance renewal will be only for Own Damage premium? Separate policies for Own damage (Annual) and Third Party (3 / 5 years)?

I would like to see a one time third party coverage for all automobiles. The own damage cover can be purchased as per the vehicle owners own choice.
At the same time the one time tax whose attrition is calculated for 20 years should be rationalised. Initial options should be for 3 yr, and 5 Yr only and a extention available only for 3 Yr and one 1 Years. Vehicles should be thoroughly evaluated, and only then further tax collected, or a scrap order issued.

Rahul

Quote:

Originally Posted by Rahul Rao

I would like to see a one time third party coverage for all automobiles. The own damage cover can be purchased as per the vehicle owners own choice.

Couldnt agree more. Especially given how the insurance companies are fleecing motorists with yearly hikes in Third Party Premium.
IIRC the TPP for my 100cc bike used to be Rs80 odd in the late nineties - the same will set you back by around Rs800 today. :Shockked:

This is a good ruling by the SC, unfortunately most SC rulings related to motor insurance go unheeded by the Insurance co and the customers. If the TPL is mandatory for three and five years, it needs to be known how IRDAI is going to manage the TPL premium rates which still are decided by them. If the premium rates are hiked then the long term TPL premium remains untouched but if the premiums go down like what happened last year, then the customers may be at a loss.

This long term TPL would be useful during the car ownership transfer too so that cars can be sold or bought without the headache of insurance validity.

Quote:

There can be two options. One would be to combine the own damage and third-party components and issue comprehensive five-year and three-year policies. This would be a good option for those customers who can afford to pay the entire premium upfront. The benefits include guaranteed No Claim Bonus, no impact of price change and no hassle of renewing the policy every year.

Another option could be issuing separate comprehensive and third-party policies, which customers can buy separately. This could be an option for those who cannot afford to pay the entire premium upfront. For such customers the regulator may allow a separate own damage product. In this case, in the first year the customer would buy a long term third-party product and one year comprehensive policy. From the second year onwards the customer can buy only the own damage component, since the third-party is already paid for.

http://www.dnaindia.com/personal-fin...p-cost-2641292

Couple of thoughts:

1. It is a good move. There are way too many 2-wheelers and - in a smaller percentage - cars running without 3rd party insurance. Making it mandatory will increase compliance.

2. Because it's made mandatory, the rates can and MUST come down. Currently, 3rd party insurance is priced ridiculously and that's a major reason why so many skip it. My Jeep's 3rd party insurance cost me 3,200 in 2011. The latest payment was 9,600 :Shockked:. Remember, this is ONLY for 3rd party (no theft, accident damage etc.).

Quote:

Originally Posted by Manoj2268 (Post 4432689)

One thing that the Govt can do is to allow the private car owner to claim a percentage of the insurance as IT returns. Car insurance - PAN - Aadhaar linking.

They already do if your car is registered in your business name.

Quote:

Originally Posted by libranof1987 (Post 4431974)

Have they bothered to check the efficacy of third-party insurance? I haven't come across one person who has claimed third-party insurance.

True that. But one thing your 3rd party insurance does do is protect your personal assets from claims by a 3rd party.

I am surprised to read this. In earlier times the only insurance that was mandatory was third party insurance. Insuring your vehicle for theft or damage was not mandatory. When I bought my first vehicle a Lambretta is c.1982 I recall going in only for third party as the law required it and skipping the general insurance because I lived on a tight budget. Maybe the rules changed in between sometime. Nevertheless it is a good move.