The government is planning to offer on-the-spot insurance cover to uninsured vehicles moving on highways, which will include deducting the premium from the owner’s Fastag account, Mint has reported.
The proposal comes amid an alarming rise in uninsured vehicles on the road, estimated to be as much as 40-50 percent of all vehicles in India.
The Centre is reportedly planning a mechanism that will provide mandatory third-party insurance cover for motor vehicle owners at the first instance when their uninsured vehicles are impounded by traffic police or transport department officials. The insurance will cover medical and treatment expenses for accident victims.
Moneycontrol could not independently verify the report.
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The report mentioned that handheld devices with police and transport department officials would not only check for insurance status of vehicles using the road and highway ministry’s Vahan app but also provide instant third-party insurance options with relevant policies of general insurers linked with the transport department’s network.
According to the report, insurance companies could also be brought to the Fastag platform along with banks with the premium getting deducted from Fastag balance, enabling instant payment of premium.
An official at the General Insurance Council (GIC) told Mint that spot insurance was also discussed in a meeting of the Council, and recommendations for its implementation are being formulated and will be discussed in a March 17 meeting. GIC is a body of the non-life insurance industry that guides government policy.
The premium for third-party insurance will depend on the size and age of vehicles, ranging from Rs 2,072 for 1,000cc passenger vehicles to Rs 3,221 for 1,000-1,500cc vehicles and Rs 7,890 for vehicles with above 1,500cc engines.
Sector regulator Insurance Regulatory and Development Authority (IRDAI) has allowed insurance companies to issue temporary or short-term motor insurance for impounded vehicles, the report stated, which could be replaced by a full third-party cover once systems are linked for delivery of the product.
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