Madras HC withdraws order on bumper-to-bumper insurance after pleas by Insurers

In its August 4 order, the HC asked for “bumper-to-bumper” insurance to be made mandatory on all new vehicles sold after September 1.

  • Money9
  • Updated On - September 15, 2021 / 01:23 PM IST
Madras HC withdraws order on bumper-to-bumper insurance after pleas by Insurers
The Counsels for IRDAI, GIC and SIAM told the court that the order mandating the bumper-to-bumper insurance may not be logistically and economically feasible.

After the insurance and automobile industry representatives pleaded that it was impossible to implement the order of the Madras High Court on bumper-to-bumper insurance for five years for new vehicles, the court withdrew the order on Monday. According to a report by a news agency, the lawyers for the Insurance Regulatory and Development Authority of India (IRDAI), General Insurance Company (GIC) and the Society of Indian Automobile Manufacturers (SIAM), an apex body of the automobile industry, made those submissions in response to the High Court’s August 4 order.

What the Court said

Justice S Vaidyanathan said that the earlier directions issued by the court “may not be conducive and suitable for implementation in the current situation. Therefore, the said direction in that para is hereby withdrawn for the present.”

The HC withdrew its order after the three bodies – IRDAI, GIC and SIAM – assured the court that protective coverage to uninsured innocent victims, such as gratuitous occupants in a private car and pillion riders, will be duly taken care of in consultation with IRDAI to safeguard the interest such innocent victims.

How companies made their case

The Counsels for IRDAI, GIC and SIAM told the court that the order mandating the bumper-to-bumper insurance may not be logistically and economically feasible. They submitted before the court that such a direction could have an “unintended impact, causing severe repercussions on the society and therefore, the directions issued by this Court may be withdrawn in the interest of the policyholders, automobile industry and public at large.”

Justice S Vaidyanathan added that in the context of the withdrawal of the direction, the circular issued by the Joint Transport Commissioner dated August 31 in this connection also stands cancelled.

In its August 4 order, the HC asked for “bumper-to-bumper” insurance to be made mandatory on all new vehicles sold after September 1. The Court had ruled that this insurance would be over and above the coverage provided to the driver, passengers, and the owner of the vehicle and that it would be operational for a period of five years.

The counsel for the Insurance Regulatory and Development Authority of India (IRDAI) said that they would consider “better and fuller insurance coverage” to all the victims, including drivers, owners and occupants of the vehicles as well as the pillion riders.

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