On Thursday, Madras High Court said that bumper to bumper insurance would be mandatory for a new vehicle when it is sold. The new rule will come into effect from September 1. This will be in addition to covering the driver, occupants and owner of the vehicle, for a period of five years. After this period, the owner of the vehicle must be cautious in protecting the occupants, driver and any third parties.
The Judge said, “This court directs that whenever a new vehicle is sold after September 1, it is mandatory for coverage of bumper-to-bumper insurance every year, in addition to covering the driver, passengers and owner of the vehicle, for a period of five years. Thereafter, the owner of the vehicle must be cautious in safeguarding the interest of driver, passengers, third parties and himself/ herself, so as to avoid unnecessary liability being foisted on the owner of the vehicle, as beyond five years, as on date there is no provision to extend the bumper-to-bumper policy, due to its non-availability,”
The judge was allowing a writ petition from the New India Assurance Company Limited in Avalpoondurai, challenging the orders dated December 7, 2019, of the Motor Accidents Claims Tribunal, Special District Court in Erode.
The insurance company said that the insurance policy that was in question was an “Act Policy”. According to the insurance company, the Act Policy only covers the risk to the vehicle by a third party and not by the occupants of the vehicle itself. If the person wants coverage for the occupant then he or she could get it by paying an additional premium.
The judge has passed this order because it would help future victims of motor accidents. However, he was not able to help the claimants in this case because the vehicle was covered only with third-party insurance. Judge also said that it is saddening that at the time of purchase of the vehicle, the purchaser or the buyer is not clear about the insurance policy and what all it covers.
Third-party insurance only offers protection against damages to the third party who is involved in the accident by the insured vehicle. It can cover physical injuries, damaged vehicles, damage to the property or death.
On the other hand, bumper to bumper insurance offers complete coverage for the vehicle that too irrespective of its depreciating parts. What this basically means that the insurance company would not subtract the value of depreciation while offering coverage. The insurance company would pay the entire cost of replacing the body parts that are damaged in the accident. Having said that, this insurance does not cover damage to the engine that is caused by water or oil leaks. It is important that the person who is taking insurance goes through the terms and conditions. Often there are asterisks marked few restrictions are written in the very fine print.