The government is planning to implement a mechanism that will offer on-the-spot insurance coverage to uninsured motor vehicles plying on highways by deducting the premium from the owner’s FASTag account, according to Livemint report. This approach to provide mandatory third-party insurance coverage comes amid an alarming increase in uninsured vehicles, which is estimated to be up to 50 percent of all vehicles on Indian roads.

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According to the World Health Organization (WHO), at least one in 10 people killed on the road across the world is from India.

The government’s mechanism will provide mandatory third-party insurance cover for owners of the vehicle whenever their uninsured vehicles are impounded by traffic police or transport department officials, reported Mint in a report quoting sources. This move will ensure immediate funds for road accident victims and also help in reducing fatalities on Indian roads, the report said.

In general, third-party motor insurance is mandatory for two-wheelers and four-wheelers in the country. It covers medical and treatment expenses for accident victims. This mandate has been set by The Motor Vehicles Act of 1988.

According to the report, one of the sources said, “the hand-held devices with police and transport department officials would not only check for insurance status of vehicles using the road and highway ministry’s Vahan app but also provide instant third-party insurance options with relevant policies of general insurers linked with the transport department’s network."

He further added that the government could also bring insurance companies to the FASTag platform along with banks to offer instant payment of premiums for on-the-spot policies.

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Spot insurance was also discussed in a meeting of the General Insurance Council (GIC) – the apex body of the non-life insurance industry that guides government policy - and recommendations for its implementation are being formulated and will be discussed in a meeting on March 17, 2023, said a GIC official.

Usually, the premium for third-party motor insurance depends on the age and size of the vehicles. It ranges from Rs 2,072 for passenger vehicles with 1000cc engine displacement to Rs 3,221 for 1000-1500cc units and Rs 7,890 for engines above 1,500cc.

Several officials across ministries have stated that the proposal would be made soon, and state governments would also be roped in to bring in the true integration of insurance, transport and prosecution agencies.

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(Edited by : Vivek Dubey)

First Published:Feb 28, 2023 3:55 PM IST