'Bumper-to-bumper' insurance should be mandatory, says Madras HC

In a significant order, the Madras High Court has ruled that "bumper-to-bumper" insurance should be mandatory whenever a new vehicle is sold, from September 1.

This must be 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, Justice S Vaidyanathan said in a recent order.

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.

In view of untoward incidents like the present one on hand, the order shall be circulated by the Additional Chief Secretary, Transport department, to all the insurance companies and he must ensure that the above direction is followed scrupulously in letter and spirit without any deviation, the judge added and posted the matter on September 30 for reporting compliance.