Progressive amendments that promote road safety and bring more transparency to the Indian road transport system have been passed by Lok Sabha, the lower house of the Indian Parliament.
The latest amendments to the three-decade-old Indian Motor Vehicle Act 1988, will strive to bring down the number of road accident fatalities in India by 50% by 2019. Indian roads are perhaps amongst the most dangerous in the world.
In 2015, India had five lakh road accidents in which more than 1.5 lakh persons were killed. On an average, one death takes place every 3.5 minutes and 400 fatalities each day due to road accidents.
The new amendments provide enhanced compensation for road accident victims and makes penalties stiffer for violators of road traffic rules. The basic aim of the amendments is to instil a sense of road safety discipline in road users and above all to save human lives.
Among other notable features of the new provisions incorporated in the Motor Vehicle Act are an eight-fold increase in the solatium fund compensation from INR25,000 (US$387) to INR200,000 in accidental death cases arising from hit-and-run accidents.
There are also provisions for specific timelines for processing of insurance claims. A 10-fold increase has been made in the amount of compensation awarded under a simplified process of claims disbursal where the family of an accident victim would get compensation of INR5 lakh as settlement within four months of the accident.
The amendments to the law also come down heavily on drunk driving. They provide that if the driver is found drunk at the time of an accident, an insurance company has the right to straightaway reject the claim. There is no possibility of any negotiation in this regard. The claim can be duly rejected on this ground and no court will entertain the offending driver.
Mr Mangesh Gandhi, Head – Claims Legal, Bajaj Allianz General Insurance speaking to Asia Insurance Review, said that the inclusion of drunk driving as a case for the rejection of third-party liability claims is a welcome step. “Earlier, though the case was mentioned as an insurance policy condition, the same was not stated in the MV Act. Because of the latter, insurers had to pay the compensation despite the fact that drivers had been under the influence of drugs or alcohol.”
While the amendments provide for avoidance of liability by insurers in such cases, to avoid liability as such, insurers would still need to amend the policy wordings at first instance and specifically incorporate such an exclusion in the policy.
“The new Motor Vehicle Act with stricter provisions will ensure road safety compliance and discipline among drivers, as now any drivers under the influence of alcohol or drugs will not only attract the penalty but the policyholder would also be legally responsible to pay compensation for any third-party losses,” Mr Gandhi added.
The amendments also provide for a Motor Vehicle Accident Fund, which would provide compulsory insurance cover to all road users in India for certain types of accidents.
The new law also provides for a National Road Safety Board, to be created by the Central Government through a notification. The Board will provide advice to the Central and State Governments on all aspects of road safety and traffic management.
Automobile manufacturers and road safety experts say that the amendments in the Indian Motor Vehicle Act assign the responsibility of each stakeholder and fixes their liabilities at each stage. It introduces a new integrated approach and a new way of looking at road safety.
The Bill will now go to the Rajya Sabha, the upper house of Parliament, for its vote, and then the President of India for his assent.