[tj123]

The Madras High Court ruled on Thursday that ‘bumper-to-bumper’ insurance was to be made mandatory for a new vehicle whenever it is sold. This is set to come into effect from September 1. The court stated that this should be in addition to the coverage of the driver, passengers and the owner of the vehicle for a period extending up to five years. After that period, the owner of the vehicle must be cautious in safeguarding the safety of the driver, passengers, any third parties as well as themselves.

“This court directs that whenever a new vehicle is sold after September 1, 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. Thereafter, the owner of the vehicle must be cautious in safeguarding the interest of driver, passengers, third parties and himself/ herself, so as to avoid unnecessary liability being foisted on the owner of the vehicle, as beyond five years, as on date there is no provision to extend the bumper-to-bumper policy, due to its non-availability,” said the Judge.

The Judge was allowing a writ petition from the New India Assurance Company Limited in Avalpoondurai, which was challenging the orders dated back to December 7, 2019, of the Motor Accidents Claims Tribunal, Special District Court in Erode. The insurance company argued that the insurance policy was only an ‘Act Policy’. This means that the coverage would only extend to the risks to the vehicle by a third party and not the occupants of the vehicle itself.

The passing of this order means that accident victims in Tamil Nadu will have greater coverage on their side. Justice Vaidyanathan also made it clear that this order would not preclude the claimants from claiming compensation for the death of the deceased from the owner of the car.

Source

[audioholic]

Indian Courts in 2022: Return to invoice and Key protection are a must when one buys an insurance policy for a car.

Indian Courts in 2023: Cars should compulsorily have turbochargers and direct injection irrespective of petrol or diesel

Indian Courts in 2024: Cars should be manufactured only in Silver, White or black colours

Fast forward to 2030: The honorable court now has published the designs for all passenger cars to be sold in India from the coming year.

Thats the future I see with such rules by the courts, NGT, what not without having a bit of common sense in them. All we see is blanket rules and bans. What is the relation between bumper to bumper insurance(NDP) and cover for the passengers? Just make it mandatory to have a cover for the living beings in the car and around it, to cover up for accidental injuries/death. Whether I damage the bumper, live with it or not is not what the court has to decide.

I feel courts are going overboard these days with the sort of judgements/directives that are passed. While mandatory third party insurance for three years was one thing, that is again not completely fool proof. Now what if a person doesnt renew insurance after that? The court's solution would be mandatory 10 year insurance. No one bats an eyelid about the role of enforcement agencies and action taken against such offenders. Only when s*** gets real and reaches the court, like in this case, we get a more absurd solution to a rather simpler problem to fix. Thanks but no thanks, your majesty!

[sen2693]

Wait, I have to now pay 5 years of insurance premium at the time of registration? Like if my premium for 1 year OD and 3 year third party was 30K, now I would have to pay 1L+ probably for insurance alone at time of registration?

Or am I reading it wrong?

[audioholic]

Originally Posted by sen2693

Like if my premium for 1 year OD and 3 year third party was 30K, now I would have to pay 1L+ probably for insurance alone at time of registration?

You read it right but you calculated it slightly wrong. You will have to also add the cost of NDP over OD for five years. While for the first year it would not increase the cost of the premium, since depreciation sets in from second year to cover this up the NDP add on would start increasing. Hence, thats the additional cost along with the premium for five years.

[PaddleShifter]

The insurance lobby must be very happy. I am not speaking for or against the court order but analysing the impact over common citizen.

Insurance beyond third party should be a personal choice. If a family has three Rs10 lacs cars and each car pay for bumper to bumper cover for five years, personal accident cover for 10 lacs, the money spent is significant. NCB is moreover lost upon claiming insurance so people tend to claim insurance only if the claim is substantial.

Insurance companies must be very happy by this ruling I suppose. If I were an owner of an insurance company, I would have been happy to even spend 50 lacs to 1 crore to have such rule in the country where I provide insurance facility. Here, the insurance agencies got it for free in the form of a court order.

[mpksuhas]

I am someone who takes B2B insurance as long as possible, however forcing one to get the same at the time of purchase itself is a a big burden.

That said, I am wondering how having B2B is going to increase the claim amount, that is under 3rd party insurance.

I hope its a case of media quoting some ruling wrongly or being a case of click bait article.

Originally Posted by tj123

The passing of this order means that accident victims in Tamil Nadu will have greater coverage on their side. Justice Vaidyanathan also made it clear that this order would not preclude the claimants from claiming compensation for the death of the deceased from the owner of the car.

[gkveda]

I cordially accept this judgement only on one condition. If insurance company rejects any of the claims, courts have to settle the amount to the owner without any questions.

If courts have authority to pass a judgement, they have to be made responsible for compensating all non-compliance of judgement they pass.

Having authority without taking accountability is like stating all actions are at my will and all consequences are yours. This can not be accepted.

[sen2693]

Originally Posted by audioholic

You read it right but you calculated it slightly wrong. You will have to also add the cost of NDP over OD for five years. While for the first year it would not increase the cost of the premium, since depreciation sets in from second year to cover this up the NDP add on would start increasing. Hence, thats the additional cost along with the premium for five years.

Isn't that just sweet. Just because someone is buying a car, does the court expect everyone will have the luxury to spend as much as they want to right at the time of buying the car? Did they think through how much will this increase the OTR cost?

[whitewing]

Wonder what happens to NCB, if we don't make a claim for say, the first 3 years? Would it come a cashback ?
For someone like me, who is yet to claim insurance, this is simply added costs.

[sunilch]

Originally Posted by whitewing

Wonder what happens to NCB, if we don't make a claim for say, the first 3 years? Would it come a cashback ?
For someone like me, who is yet to claim insurance, this is simply added costs.

The govt is going to love this. Not just your NCB is gone, you will be paying a massive amount as GST when buying a new car.


Though the insurance company may give you discount based on your past history of owning other vehicles, for first time buyers - they are doomed. Buying a new vehicle is surely going to be more expensive. Not to mention, dealers forcing you to pick their provider and policy, which is another windfall for them in terms of commissions.

If this goes national, then I believe companies will come with a policy to return/adjust left over premium in case of total loss of vehicle before 5 hears. But until then, simply pay and think of it as a mandatory donation when buying a new car.

[drivingmelody]

Does this ruling apply to vehicles sold in Tamil Nadu alone or other states as well?
There is going to many registrations before the Sep 1 deadline

[tj123]

Originally Posted by drivingmelody

Does this ruling apply to vehicles sold in Tamil Nadu alone or other states as well?
There is going to many registrations before the Sep 1 deadline

Based on media reports its seems that this order is applicable pan India. Seriously buying, owning, operating a car is now a pain in India and this move can further depress the sales of new car.

[giri1.8]

Just leaving this Unrelated video here

https://youtu.be/zfdSTyAcXfs

[speedmiester]

There are a few things that are not clear from the news article.

The judgement refers to a case in which an Insurer has argued that the policy only covers the risks to the vehicle and not the occupants.
This has nothing to do with the bumper to bumper cover or Zero dep cover which essentially takes care of costs associated with depreciation of parts of a car.
To cover the occupants, there are add on covers which is similar to personal accident cover. These are not expensive and will cost around Rs. 200/ year.

I am confused by the news report, here the Judge has passed judgement to make Zero dep cover mandatory which has nothing to do with the occupants of a car.

Definitely need to wait before getting more clarity on this.

Sharing another news article which has bit more info but still as confusing as above

Make mandatory ‘bumper-to-bumper’ insurance: Madras HC

The judge was allowing a writ petition from the New India Assurance Company Limited in Avalpoondurai, challenging the orders dated December 7, 2019 of the Motor Accidents Claims Tribunal, Special District Court in Erode.

The Insurance company pointed out that the insurance policy in question was only an “Act Policy”, which would cover only the risk that might be confronted by a third party to the vehicle and not its occupants. The coverage for an occupant of the vehicle could be extended upon payment of additional premium by the owner of the car, the insurance company contended.

The judge passed this order, which would go a long way in coming to the aid of lots of accident victims. He, however, could not come to the rescue of the claimants in this case, as the vehicle, in which their breadwinner was travelling/driving, was covered only with third-party insurance.

Left with no other choice but to deprive the claimants of the accident benefits ordered by the Motor Accidents Claims Tribunal in Erode, the judge quashed the order of the Tribunal awarding a compensation of Rs 14.65 lakh to K Parvathy and three others.

The judge, however, made it clear that this order will not preclude the claimants from claiming compensation for the death of the deceased from the owner of the car, as per the terms of the policy for which the car was insured.

Before parting with this judgment, the judge said that 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. Similarly, at the time of buying the vehicle, the buyer is also not interested in thoroughly understanding the terms and conditions of the policy, as he/ she is more concerned about the vehicle’s performance and not about the policy.

When a buyer is ready to pay a huge amount for purchase of a vehicle, it is really shocking as to why he/ she is not interested in spending a paltry sum to take a policy so as to safeguard himself/ herself and others.

“Therefore, this court directs that whenever a new vehicle is sold after September 1, 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. Thereafter, the owner of the vehicle must be cautious in safeguarding the interest of driver, passengers, third parties and himself/ herself, so as to avoid unnecessary liability being foisted on the owner of the vehicle, as beyond five years, as on date there is no provision to extend the bumper to bumper policy, due to its non-availability, the judge said.

[GTO]

Originally Posted by PaddleShifter

The insurance lobby must be very happy.

And that of car finance too. 3/4th of new cars sold in India are financed, and the ticket size just went up! But a silly rule really. For one, 99% of owners consider their cars as "prized possessions" and will anyway take full insurance in the initial years of ownership. Second, there are too many ifs & buts with mandating 5-year insurance policies. What if insurance rates go up or down? 5 years is a long time, after all. What about NCB? What if its one of the new age insurance startups that shuts down? Is there a discount? Insurance companies are being prepaid for 5 years - just think of the interest implications alone.