Compensation for road accident victims increased 10-fold

The government has announced a 10-fold increase in the minimum compensation payable to road accident victims.

According to a media report, the minimum compensation in case of death in a road accident has been increased from Rs. 50,000 to Rs. 5 lakh and for permanent disability will be in the range of Rs. 50,000 to Rs. 5 lakh depending on the extent of disability. Both amounts will increase by 5% annually. Earlier, the default compensation for a permanent disability was Rs. 25,000. 

The figure was selected based on the average compensation paid from the years 2011-12 to 2015-16. The claim amount ranged between Rs. 3.00 - 4.90 lakh. This move is expected to cut down on the total number of cases that go to litigation. 

If the victim believes they deserve higher compensation, they can pursue the case in the Motor Accident Claims Tribunal (MACT). In this case, the compensation will be paid based on a structured formula under Schedule-II of the Motor Vehicles Act 1988. It is rumoured that this will cause an increase in the third-party insurance premiums. 

Source: Times of India