SC extends mandatory third-party insurance to 4 years for new cars, 6 years for two-wheelers
THE JHARKHAND STORY NETWORK New Delhi, Aug. 4: In a landmark move aimed at improving road safety and ensuring better compensation for…
THE JHARKHAND STORY NETWORK
New Delhi, Aug. 4: In a landmark move aimed at improving road safety and ensuring better compensation for accident victims, the Supreme Court has directed that mandatory third-party insurance for new cars be increased from three years to four years, and for new two-wheelers from five years to six years.
The directions were issued by a Bench comprising Justice Sanjay Karol and Justice Augustine George Masih, which observed that despite its 2018 order mandating long-term third-party insurance, a large number of vehicles across the country continue to remain uninsured.
The court directed the Insurance Regulatory and Development Authority of India (IRDAI) to issue the necessary guidelines immediately.
Supreme Court Cites Road Safety Concerns
The Bench noted that although the Insurance Regulatory and Development Authority of India (IRDAI) and the General Insurance Council (GIC) had opposed extending the insurance period, the larger public interest warranted the move.
“We notice that despite eight years having passed from the said direction, a large number of vehicles remain uninsured. While the IRDAI and GIC have recommended that this period not be enhanced, we are of the view that it is in the interest of road safety that the period be enhanced by one year.
Therefore, it is directed that henceforth, third-party insurance for four years for new cars and six years for new two-wheelers be required to be purchased. IRDAI shall immediately issue the necessary directions,” the Bench ordered.
Court Suggests Technology-Driven Enforcement
To improve compliance with mandatory motor insurance provisions, the Supreme Court issued several additional directions.
The court directed that Automatic Number Plate Recognition (ANPR) cameras installed on highways and major roads be integrated with the Insurance Information Bureau (IIB) database and the VAHAN portal to enable real-time verification of insurance status.
It also suggested linking fuel supply at petrol pumps with valid insurance records through technological integration. Under the proposed mechanism, uninsured vehicles could be denied fuel until their insurance is renewed.
The Bench further observed that such integration would allow authorities to automatically generate e-challans for uninsured vehicles while simultaneously detecting other traffic violations such as speeding and red-light jumping.
In addition, the court directed that police personnel across states be equipped with handheld devices or mobile applications connected to the insurance database and the VAHAN portal, enabling them to verify insurance status instantly and issue challans on the spot.
Directions Issued While Deciding Motor Accident Case
The directions came while the Supreme Court dismissed an appeal filed by National Insurance Company Ltd. in a motor accident compensation case.
While deciding the appeal, the Bench expanded the scope of the proceedings to examine broader issues concerning motor vehicle insurance compliance across the country.
The court identified two major concerns: widespread non-compliance with Section 146 of the Motor Vehicles Act, which mandates third-party insurance for all vehicles, and the need for a uniform insurance policy structure that provides protection not only for third parties but also for vehicle occupants.
Nearly 56% of Vehicles Uninsured, Says Supreme Court
Expressing serious concern over the extent of non-compliance, the Supreme Court noted that nearly 56 per cent of vehicles on Indian roads remain uninsured.
Citing the Parliamentary Standing Committee’s report, the Bench observed that around 16.54 crore of the country’s 30.48 crore registered vehicles do not have valid insurance coverage.
The court said this leaves accident victims struggling to obtain compensation.
“The object behind mandatory insurance under Section 146 of the Motor Vehicles Act is not merely to ensure that victims of road accidents are compensated, but also to ensure that they are not drawn into prolonged litigation,” the Bench observed.
The court also referred to official data showing that more than 4.87 lakh road accidents were reported in 2024, noting that uninsured vehicles significantly increase the hardship faced by accident victims and their families.
