Supreme Court Flags 16.54 Crore Uninsured Vehicles, Proposes ‘No Insurance, No Fuel’

 

 

New Delhi: In a move that could dramatically change how vehicle insurance rules are enforced across India, the Supreme Court has asked the Centre to develop a pilot project based on a simple but stringent principle — “No Insurance, No Fuel.”

The proposal could eventually allow petrol pumps to deny petrol or diesel to vehicles that do not have valid mandatory insurance, as the apex court raised alarm over the massive number of uninsured vehicles plying on Indian roads.

A Bench of Justices Sanjay Karol and Augustine George Masih took note of data showing that more than half of the country’s vehicle fleet remains outside the insurance net. Government data placed before Parliament had estimated India’s vehicle fleet at 30.48 crore, of which 16.54 crore vehicles were uninsured — highlighting a huge gap in compliance with mandatory third-party insurance requirements.

New Cars, Bikes to Get Longer Mandatory Insurance Cover

Taking a tougher approach towards long-term compliance, the Supreme Court also extended the mandatory third-party insurance period for newly purchased vehicles by another year.

Under the revised requirement, new cars will need four years of third-party insurance, while new two-wheelers will require six years of cover. The earlier framework, flowing from the Supreme Court’s 2018 intervention, required three-year third-party cover for new cars and five-year cover for new two-wheelers.

The court observed that despite mandatory insurance provisions being in place for years, a substantial number of vehicles continue to operate without valid cover, calling for stronger enforcement mechanisms.

Petrol Pumps Could Become Insurance Checkpoints

The court asked the Ministry of Road Transport and Highways (MoRTH) and the Insurance Regulatory and Development Authority of India (IRDAI) to examine the feasibility of a pilot mechanism under which fuel could be denied to uninsured vehicles.

If implemented, the system could turn fuel stations into an important enforcement point, making it difficult for vehicle owners to continue driving after allowing mandatory insurance to lapse.

The proposed mechanism is aimed not merely at penalising motorists, but at pushing owners towards timely renewal of third-party insurance and ensuring that road accident victims are not left without an effective source of compensation.

Cameras Could Spot Uninsured Vehicles Automatically

The Supreme Court also backed greater use of technology to identify vehicles operating without insurance.

Automatic Number Plate Recognition (ANPR) cameras installed along roads and highways could potentially be linked with insurance records and the government’s VAHAN database. Vehicles detected without valid insurance could then face automatic challans.

The court also envisaged technological support at petrol pumps for checking insurance status, while police personnel could be equipped with mobile applications or devices to instantly verify vehicle insurance and take enforcement action.

Insurance Linked to Road Safety and Victims’ Rights

The Bench underlined that mandatory third-party insurance cannot be viewed merely as another regulatory formality. Its larger purpose is to ensure that victims and their families have access to compensation after road accidents instead of being forced into prolonged litigation or chasing vehicle owners who may not have the financial capacity to pay.

The court linked effective insurance enforcement with the broader protection of life and road safety, stressing the need for a system that provides meaningful financial protection to accident victims.

It also favoured a simpler, layered motor insurance framework comprising mandatory third-party cover, optional liability protection for passengers and pillion riders, personal accident protection and optional own-damage cover.

Insurers were asked to make policy terms easier for consumers to understand and clearly explain the additional protections available rather than burying important conditions in complicated policy language.

Compensation Case Triggers Wider Intervention

The directions emerged from litigation concerning compensation following the death of a man travelling in an insured vehicle in a road accident.

While dealing with the insurance dispute, the Supreme Court upheld the compensation awarded to the deceased’s family and used the case to address the much wider problem of millions of uninsured vehicles operating across India.

The intervention could have far-reaching consequences. If the proposed pilot succeeds and is expanded nationwide, an expired insurance policy may no longer mean merely the risk of a traffic challan — it could potentially leave a vehicle unable to refuel.

For India’s crores of motorists, the message emerging from the Supreme Court is increasingly clear: keep your vehicle insured, or keeping it on the road could become much harder.