Bumper-to-Scooter Auto Insurance: Is There a Coverage? – cash life
It remains to be seen whether vehicle buyers will have to pay a huge upfront insurance premium for five years from Wednesday to comply with the Madras Supreme Court order.
As things stand, new car buyers in Tamil Nadu will have to pay high premiums for five years from Wednesday.
The industry lobbying body, the General Insurance Council, was found to be considering various options, including legal options, to get out of the situation.
But where is the policy is the question.
"The IRDAI (Insurance Regulatory and Development Authority of India) must first approve such a product. There is no five-year bumper insurance for cars," Saharsh Damani, CEO, Federation of Automobile Dealer Associations (FADA) told IANS.
Non-insurance industry officials told IANS that none of the insurers have five-year bumper coverage for cars and two-wheelers.
Such a product must be designed according to actuarial calculations.
Industry representatives, starting with the sectoral regulator IRDAI and the insurers, are holding back on this issue, although they claim to serve the interests of the insuring public.
Recently, the Madras Supreme Court ruled that expensive bumper insurance coverage was compulsory for all new private cars sold on or after September 1, 2021.
The court also ordered the additional chief secretary, Transportation Department, Chennai, to forward the verdict to all insurers, and the named officials must ensure that the above instruction, both oral and written, is diligently followed without any deviation.
"Why should the insurers issue instructions. They will be happy when the contract is implemented, as they receive a flat premium in advance," an insurance broker, who did not want to be quoted, told IANS.
The headless IRDAI has not issued any public notice / guidance on this.
The Tamil Nadu government is also silent on this issue, as the court ordered that its order be forwarded to an additional chief secretary of the transportation department.
"We have not received a circular from headquarters on this matter," an official from a public property insurer told IANS, who preferred anonymity.
The court released the matter for September 30th to report compliance.
"Insurers will remain silent because the court did not order them. It is up to the IRDAI to provide the necessary instructions that make accident insurance compulsory for occupants of private cars and two-wheeler passengers. It is now optional," Americai V Narayanan, chairman of ICM Insurance Brokers Pvt Ltd., told IANS.
Mr Narayanan said that the bumper-to-bumper coverage will cost more than the fully comprehensive cover, as claims under the former will be settled on a replacement cost basis while after the latter, component cost write-off will be applied.
Car insurance consists of two parts – personal damage (insurance of the vehicle against damage, theft) and liability (liability for third parties).
Liability coverage is mandatory, while vehicle damage coverage is not mandatory.
The Madras Supreme Court order makes vehicle insurance compulsory.
"It is an apparently untenable order (court order) and would not stand up to legal scrutiny if the vehicle manufacturers or any other injured party appealed," said D Varadarajan, a corporate / competition / insurance lawyer specializing in the Supreme Court IANS.
Regarding the lack of awareness of car owners about the liability for the occupants of the car, the court ordered during a hearing: “That is why this court orders that every sale of a new vehicle after 09/01/2021 is for a period of five years In addition to protecting the driver, occupants and the owner of the vehicle, it is mandatory annually for the cover of the bumper-to-bumper insurance. "
“After that, the owner of the vehicle must be careful to protect the interests of the driver, passengers, third parties and himself in order to avoid unnecessary liability of the owner of the vehicle, since the owner of the vehicle continues to be the owner of the vehicle for more than five years as on the day Es there is no provision to extend the bumper-to-bumper policy due to its unavailability, "ordered the court.
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