Supreme Court extends third-party insurance cover of new vehicles by a year
The Supreme Court on Tuesday (August 4, 2026) extended the mandatory third-party motor insurance coverage of new vehicles by a year. New cars will now
The Supreme Court on Tuesday (August 4, 2026) extended the mandatory third-party motor insurance coverage of new vehicles by a year. New cars will now have four years of coverage and two-wheelers six years, it said. The court observed that despite the statutory mandate, a “shocking” number of vehicles continued to ply on Indian roads without third-party insurance, forcing accident victims and their families to “run from pillar to post” to secure compensation. The court proposed a system in which vehicles without valid insurance can be denied fuel at petrol pumps. “While the Insurance Regulatory and Development Authority of India (IRDAI) and the General Insurance Council (GIC) have recommended that this period not be enhanced, we are of the view that it is in the interest of road safety that the period be enhanced by one year. Therefore, it is directed that henceforth, third-party insurance for four years for new cars and six years for new two-wheelers be required to be purchased. IRDA to immediately issue necessary directions,” a Bench of Justices Sanjay Karol and Prashant Kumar Mishra said. In its 2018 judgment in the S. Rajaseekaran v. Union of India case, the apex court had required purchasers of new vehicles to obtain three-year third-party insurance for cars and five-year cover for two-wheelers at the time of purchase or registration.
Data integration The Bench also directed that Automatic Number Plate Recognition cameras, deployed on highways and roads to detect traffic violations, be integrated with insurance data maintained by the Insurance Information Bureau of India (IIB) and vehicle registration data available on the VAHAN portal. It further directed that State police personnel be equipped with mobile applications linked to the IIB and VAHAN databases, enabling them to verify the insurance status of vehicles in real time and issue challans for violations. The directions were issued while the apex court was hearing an appeal by an insurance company against a 2024 Telangana High Court ruling directing it to pay ₹10 lakh in compensation to the family of a road accident victim, who was the sole breadwinner of the household. The insurer had disputed its liability to pay the compensation, contending that no additional premium had been paid to cover the personal risk of the vehicle owner. The top court, however, dismissed the appeal and directed the insurer to pay the compensation awarded to the victim’s family, observing that courts dealing with motor accident claims should not adopt a “hyper-technical approach”. It flagged the high number of uninsured vehicles on Indian roads, observing that the lack of third-party coverage often leaves accident victims and their families embroiled in prolonged litigation over liability and the quantum of compensation.
The BriefWire