New Delhi: In a significant decision, the Madras High Court has said that from September 1, if any vehicle is sold, 'bumper-to-bumper' insurance should be mandatory. This should be separate from the insurance covering the driver, passengers, and vehicle owner for five years. During the judgment, the court said that the owner of the vehicle should be alert to protect the interests of the driver, passenger, third party and himself, so as to avoid imposing extra burden on the owner of the vehicle.

The judge was hearing an application by New India Assurance Company Limited challenging the December 7, 2019 orders of the Motor Accident Claims Tribunal, Special District Court, Erode. The insurance company stated that the insurance policy in question would only cover the peril faced by a third party to the vehicle and not by its occupants. The insurance company argued that the coverage for the owner of the vehicle can be increased on payment of additional premium by the owner of the car.

The judge denied the order to pay a tribunal compensation of Rs 14.65 lakh to K. Parvati and three others. The judge, however, made it clear that the order would not prevent the claimants from claiming compensation for the death of the deceased from the owner of the car under which the car was insured. Before departing from this decision, the judge said that it is sad to state that when a vehicle is sold, the buyer is not clearly informed about the terms of the policy and its importance.

At the same time, the court also said that while buying a vehicle, the buyer is also not interested in understanding the terms and conditions of the policy thoroughly, as he is more concerned about the performance of the vehicle and not the policy. The court said that the court directs that whenever a new vehicle is sold after September 1, bumper-to-bumper insurance shall be mandatory for every year covering the driver, passengers and owner of the vehicle for a period of five years.

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