Non-owner drivers can get insurance; TAC rectifies 2002 error

After a three-year delay, the Tariff Advisory Committee (TAC), a government consituted body under the Insurance Act, has retrospectively corrected a printing error which denied insurance cover to ‘unnamed’ drivers of motor vehicles.

As a result, those who were refused compensation under the ‘unnamed drivers’ category between July 1, 2002 and October 2005 (when the error was in operation), can now claim it afresh.

Unnamed drivers are those who are not insured personally, not being either owners of the vehicle or paid drivers or employees of the owner. Often such persons are the vehicle owner’s close relatives.

IMT 16, a regulation under Indian Motor Tariff (IMT), to which all vehicle insurance policies have to conform, provides for insurance cover to such persons. When purchasing an insurance policy, the owner of the vehicle can pay an additional premium so that all persons using the vehicle get insured.

In 1995, the TAC (which frames IMT) decided that those who drive a vehicle, not being its owners/paid drivers, would also be covered under this.

However, through a printing error, words “but not driving” crept into the section in July 2002 revised version.

A Mumbai-based diamond merchant Prakash Sheth realised this when a personal tragedy struck. In May 2005, Sheth’s nephew died in an accident while driving his father’s car.

However, relying on 2002 edition of the IMT, the New India Assurance Company rejected the insurance claim by the nephew's parents. The car was insured in the nephew’s father’s name.