Is your vehicle insured? SC orders auction of uninsured vehicles involved in accidents to compensate victims

If your vehicle’s insurance is about to expire do get it renewed on time! Otherwise, you run the risk of your vehicle being impounded in case you meet with an accident and later auctioned to meet compensation claims of accident victims.

The Supreme Court has recently passed a order that all states and union territories will have to frame rules to compensate accident victims by auctioning uninsured motor vehicles. The order is for uninsured vehicle or the vehicles whose insurance policy has expired and any accident is caused by such vehicle.

Tarun Mathur, Chief Business Office- General Insurance, Policybazaar.com told Moneycontrol that SC passed the ruling in the recent case of Usha Devi vs. Union of India on September 13, 2018. The ruling was a reiteration of the earlier court order in Jai Prakash Vs. National Insurance Company Limited.

Here are the few outcomes of the SC ruling you should be aware of:

=| If there is an accident caused by an uninsured vehicle/or the vehicle whose insurance policy has expired (vehicle owner is not in the capacity to compensate for the loss) then the particular vehicle will be seized by the state government and the owner will be given the window of 3 months to pay for the loss to of the third-party.

=| If the owner fails to pay for the loss, then his/her vehicle will be auctioned and the proceeding of the same will go to compensate for the loss to the other party.

=|Supreme Court has directed the State Governments and Union Territories to implement the order within 12 weeks of the date of the order.

=| The order is passed looking at the owners who really cannot pay and if the sole bread earner of the family is the accident victim.

=| This is to ensure that no uninsured vehicle runs on the road and families of helpless victims do not suffer because of the fact that the vehicle is uninsured.

=| The order states that no court shall release the motor vehicle which is involved in an accident resulting in damage to property, bodily injury or death if the owner fails to furnish the copy of insurance policy.

=| The public auction will be conducted by the magistrate having jurisdiction over the area where the accident occurred and the proceeds will be deposited with the claims tribunal having jurisdiction over the area in question.

How to avoid such situations?

=| To avoid such extreme circumstances it is advisable to compare and buy comprehensive motor insurance online. Online policies are issued and renewed instantly.

=| Through online verification process, it has now become very easy to renew an expired policy in a matter of minutes without going through the hassle of waiting for the inspection agency, submission of physical documents etc.

Mathur said that the order of the apex court will go a long way in ensuring that vehicle owners are not found wanting as far as insurance validity is concerned. “The punitive action levied by the court is justified because with the advent of new technological innovations such as the self-inspection video not having a valid insurance is no excuse as a renewal of lapsed insurance has become a matter of two-three hours now and at the same time your mobility is not affected,” he said.