The government is working out ways to nudge vehicle owners to get third-party insurance policy, so that they able to safeguard themselves from any financial liability in case of an accident.
Currently, Insurance Regulatory and Development Authority of India (IRDAI) is working on a pilot scheme with some states–Telangana, Karnataka, Rajasthan and Bihar—to extract data pertaining to insured and uninsured vehicles. The government will then send messages to vehicles owners without insurance, in a bid to have greater compliance.
“The pilot scheme has already been rolled out by Telangana,” IRDAI member TL Alamelu said on Tuesday.
In 2018, the Supreme Court had made two-wheeler insurance compulsory for five years and four wheeler insurance for three years as far as purchase of new vehicles are concerned, transport minister Nitin Gadkari said. There is a provision of the fine amounting to ₹2,000, under the Motor Vehicles Act, in case of any default.
Under the third party insurance, the responsibility of compensating an accident victim shifts from the vehicle owner to insurance company, as not all vehicle owners are in a position to compensate the injured.
This comes in the backdrop of India being one of the countries with highest number of road accident related deaths. There were 1,51,417 deaths due to road accidents in 2018, an increase of 2.3% from 2017, according to road ministry data.
As much as 40% vehicles plying on the road are not insured. Commercial vehicles have the highest compliance with 80% of them insured, while 80% of the two wheelers not insured. In case of private cars, 60% of them are insured. Incidentally, in 2018, 31% of death due to road accident was because of two wheelers.
Gadkari also called for including the road projects in the country into the ambit of insurance. He said that several countries such as Canada, Australia, USA, South Africa and UK are follow the practice of insuring infrastructure projects.
The transport ministry is also setting up a Motor Vehicle Accident Fund, which will fund the amount for compensation for hit and run cases, the minister said. The fund will also be used for medical treatment of accident victims, he said.