Come April 1, car owners might not be able to obtain a third-party insurance cover if they do not have FASTags for their cars.
Though the proposal is still in the works, a release issued by the Ministry of Road Transport and Highways has sought to amend Form 51 (certificate of insurance) for capturing the details of FASTag ID. The draft notification has been sent to various stakeholders for feedback.
The ministry also proposes to make FASTags mandatory for vehicles sold before December 2017. FASTag was made mandatory since December 2017 for registration of new four-wheeled vehicles. It was also made mandatory for renewal of fitness certificates and for vehicles with a national permit.
FASTag is an electronic device that enables drivers to cross toll plazas without stopping. The toll gets automatically deducted from a linked bank account or prepaid wallet.
Ankit Agarwal, chief executive officer and co-founder, InsuranceDekho, said: “IThe government is starting with FASTags, but it will, over time, also make it compulsory for vehicles to have an onboard telematic device for capturing driving behaviour. This will enable insurance companies to have differential pricing, and reward good drivers with lower premium rates while punishing rash ones with higher rates.”
Some stakeholders say that the proposal, which has not reached insurance companies for comments yet, needs to be properly evaluated.
“Forcing people to have FASTags may lead to a situation where they may skip insurance altogether,” said Animesh Das, head of product strategy, Acko General Insurance. Some experts said the preconditions might hinder sale of insurance products. “Insurance is already an under-penetrated product in the country. In such a scenario, the government is putting something like FASTag on top of insurance. It is, in a way, disincentivising people from buying insurance. Someone comes to buy insurance and you ask him to get FASTag first. He will drive around without insurance for 15-20 days. What if there is an accident?” said Sajja Praveen Chowdary, business head, motor insurance, PolicyBazaar.com. He said the government should have instead said that a person can’t get FASTag unless he has insurance.