Page 54 - Insurance Times April 2023

Govt plans revamp of auto

insurance policy

ninsured vehicles plying on highways are set to The premium for third-party insurance depends on the size
U be offered on-the-spot insurance cover, with the and age of vehicles, ranging from Rs. 2,072 for 1000cc-
government discussing a plan that includes
passenger vehicles to Rs. 3,221 for 1000-1500cc vehicles and
deducting the premium from the owner's Fastag
Rs. 7,890 for vehicles with above 1,500cc engines.
account.
Questions sent to the spokespeople for ministries of finance,
The new approach to motor insurance has been brought
and road transport and GIC remained unanswered till press
about by an alarming rise in uninsured vehicles on the road,
time.
estimated to be as much as 40-50% of all vehicles in India.
Officials across ministries said some way forward on the
According to two people aware of the development, the
proposal would be made soon, and state governments would
Centre is discussing a mechanism that will provide
also be roped in to bring in the true integration of insurance,
mandatory third-party insurance cover for motor vehicle
transport and prosecution agencies for the larger goal of
owners at the first instance when their uninsured vehicles
are impounded by traffic police or transport department making Indian roads safer.
officials.
"Insurance regulator IRDAI has already allowed insurance
Third-party insurance covers medical and treatment companies to issue temporary or short-term motor
expenses for accident victims. insurance for impounded vehicles. This could be replaced by
a full third-party cover for the uninsured once systems are
"The hand-held devices with police and transport
linked for delivery of the product," said another official, who
department officials would not only check for insurance
status of vehicles using the road and highway ministry's did not want to be identified.
Vahan app but also provide instant third-party insurance
Legal issues related to the changes are being studied, and
options with relevant policies of general insurers linked with
if needed, the Motor Vehicles Act and insurance rules could
the transport department's network," said one of the
be amended to allow for the roll-out of the proposal.
persons quoted above.
Even as India embarks on a plan to build a network of
"For instant payment of premium for on-the-spot policies,
highways and expressways for fast movement of passengers
insurance companies could also be brought to the Fastag
and goods, road safety continues to be a major problem --
platform along with banks, with the premium getting
deducted from Fastag balance," he added. it's a developmental issue, a public health concern and a
leading cause of death and injury.
An official at the General Insurance Council (GIC) said spot
insurance was also discussed in a meeting of the Council, At least one in 10 people killed on the road across the world
and recommendations for its implementation are being is from India, according to the World Health Organization.
formulated and will be discussed in a 17 March meeting. This move will ensure immediate funds for road accident

GIC is a body of the non-life insurance industry that guides victims, thus helping reduce fatalities on Indian roads.
government policy. (Source: Mint)

The Insurance Times April 2023 47