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Informist, Tuesday, Aug. 4, 2026

 

NEW DELHI – The Supreme Court Tuesday asked the Insurance Regulatory and Development Authority of India, in consultation with the Ministry of Road, Transport and Highways, to develop a pilot project linking the sale of fuel to a vehicle's valid insurance status. Under the proposal, vehicles without valid insurance would be denied fuel at petrol pumps until insurance is obtained, the court said. The measure would help identify uninsured or unregistered vehicles and prompt their owners to obtain valid insurance coverage. 

 

The top court ordered that the period of third-party insurance has to be increased to four years from three years for new cars and six years from five years for two-wheelers. Despite the apex court mandating third-party insurance eight years ago, a large number of vehicles remain uninsured, the court said. While the Insurance Regulatory and Development Authority and General Insurance Council of India recommended that the previous period not be enhanced, the court said that in the interest of road safety, the period be enhanced by one year, a bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra said.

 

The apex court asked the road ministry to implement pilot projects on certain corridors, substituting the process of stopping at toll plazas with automatic detection of vehicles passing through toll points. The court said that it was cognizant of the number of road accidents on national highways and also the effect that long queues at toll plazas have on road accidents. 

 

Automatic number plate recognition cameras are to be integrated with data from the Insurance Information Bureau and the VAHAN portal for issuance of automatic e-challans to uninsured vehicles, the court said. Currently, these cameras are deployed on highways and roads are equipped with a mechanism to catch and penalise road safety violations such as high speed, red light jumping, and driving on the wrong side of the road, it said. Noting that there is no uniform mechanism in place with state police to verify insurance status on the ground, the court said that the police be provided with handheld devices or downloadable applications, linked with the data from the Insurance Information Bureau and the VAHAN portal. 

 

The court said that for private vehicles, a broad four-layer structure is to be implemented for insurance policies to bring clarity to various policy options for the vehicle-owner so as to allow them to make an informed choice. These will be third-party insurance, which will be a base policy and minimum cover, whose pricing will be fixed by a consultative process between the regulator and the Centre, the court said. There will be additional optional cover for the pillion rider or occupants in a vehicle and this addon will be optional and available at an additional premium, whose pricing will be determined by the respective insurance companies, it said. The other two will be personal accident cover for the owner, driver and any occupant and own damage cover to cover liability for loss or damage to the insured vehicle, the court said. Consequently, every customer, at the time of purchase of insurance, will be issued a customer option form, whether offline or online, whereby they may opt in via check box to the add-on options, it said.

 

In addition, the benefits of obtaining comprehensive motor-vehicle insurance policies have to be displayed in an easy-to-read format on the websites of the insurance companies, the court said. A pilot-project be implemented allowing citizens to verify insurance status, and ultimately assist with the implementation of the statutory mandate under the Motor Vehicles Act, 1988 said the court. 

 

The top court was dealing on the issues relating to lack of compliance of Section 146 of the Motor Vehicles Act, which requires all vehicles to have a valid insurance policy covering third-parties. It was also dealing with the issue whether there should be a uniform motor-vehicle policy structure covering all occupants of a vehicle, in addition to the statutorily mandated coverage of third-party risks.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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