No Third-Party Insurance, No Petrol: Supreme Court Directs Government and IRDAI to Start Trial Run

The Supreme Court has directed the Centre and the Insurance Regulatory and Development Authority of India (IRDAI) to formulate a pilot project under which vehicles without valid third-party insurance could be denied fuel. The move is aimed at increasing insurance coverage and protecting accident victims.

A bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra also directed the authorities to explore extending the mandatory insurance period for newly purchased vehicles. Under the proposed change, the mandatory insurance period could increase from three to four years for new cars and from five to six years for new two-wheelers.

No Petrol for Vehicles Without Third-Party Insurance?

The Supreme Court has asked the Centre and IRDAI to work on a pilot project to deny petrol to vehicles that do not have valid third-party insurance.

The court observed that despite long-term third-party insurance being made mandatory in 2018, a large number of vehicles are still running without valid insurance. The proposed pilot project is intended to improve compliance and ensure greater financial protection for people injured in road accidents.

New Vehicles May Require Longer Insurance Cover

The court has also directed IRDAI to issue necessary directions regarding the proposed extension of mandatory insurance coverage.

Under the proposal, the mandatory insurance period for new cars could rise from three years to four years, while that for new two-wheelers could increase from five years to six years.

This could mean that buyers may have to make a higher one-time insurance payment when purchasing a new vehicle.

Supreme Court Orders Cameras to Track Uninsured Vehicles

The Supreme Court has also issued directions aimed at identifying vehicles operating without valid insurance.

The Centre has been asked to connect highway cameras with the Insurance Information Bureau and the Vahan portal. On selected highways, an automatic vehicle identification system could be introduced at toll plazas.

The system would help identify uninsured vehicles and facilitate the automatic issuance of e-challans.

Police personnel may also be provided with mobile applications or handheld devices to check the insurance status of vehicles in real time.

Vehicle Owners May Get Insurance Status Check Facility

The court has further directed that citizens should have access to a facility allowing them to verify their vehicle's insurance status.

The system should display information regarding whether the vehicle has valid third-party or comprehensive insurance coverage.

Such a mechanism could make it easier for vehicle owners to track their insurance validity and avoid inadvertently driving without mandatory coverage.

Over Half of India's Vehicles Reportedly Uninsured

The scale of the issue is significant. According to a parliamentary committee report cited in the proceedings, India has around 30.48 crore vehicles, of which approximately 16.54 crore do not have valid insurance.

This means nearly 56% of vehicles are reportedly operating without valid insurance coverage.

The Supreme Court's latest directions seek to address this gap through technology-based enforcement, stronger monitoring and a possible fuel-denial mechanism.

What the Supreme Court's Direction Could Mean for Vehicle Owners

If the proposed measures are implemented, vehicle owners could face stricter checks on insurance validity. The possible introduction of fuel denial for uninsured vehicles, automated e-challans and real-time insurance verification could make it considerably harder to operate a vehicle without mandatory third-party insurance.

The proposed extension of insurance coverage for newly purchased vehicles could also increase the upfront cost of buying a new car or two-wheeler, although it would provide longer insurance protection.

The next major step will be the formulation of the pilot project by the Centre and IRDAI and the issuance of detailed directions explaining how the proposed system will work.