The insurance regulator IRDAI has said that insurance companies must ensure easy availability of mandatory motor third-party liability cover, including online, and under no circumstance should they deny a request for third-party cover.
Hitherto, insurance companies were offering only comprehensive motor cover online.
The IRDAI circular follows a directive from the Supreme Court Committee on Road Safety requiring state governments to conduct checks on vehicle to ensure that all of them have the mandatory third-party insurance, reported Times of India. The circular also follows complaints by states that the cumbersome process of obtaining third party insurance is hampering the implementation of the apex court order.
The committee said that in case a vehicle does not have third party insurance, the vehicle should be detained until such time the third party insurance certificate is produced by the vehicle owner. At present, traffic authorities merely penalise the vehicle owner in case he is not able to produce a valid third party insurance cover.
A total of 480,652 road accidents took place in India in 2016, resulting in the loss of 150,785 lives and inflicting serious injuries on 494,624. This has resulted in motor insurance being an unprofitable portfolio for insurance companies. Although the regulator has taken measures to offset the losses, insurance companies do not go out to acquire this business as the administrative costs are high, particularly in the case of two-wheelers.