Budget cars’ insurance may cost Rs 50,000, 2-wheelers' can go up by Rs 8,000: FADA
Vinkesh Gulati, president of the Federation of Automobile Dealers Associations (FADA), on Friday, said that the Madras High Court has suggested making bumper-to-bumper insurance coverage mandatory for every new vehicle that is sold after September 1.
As the Federation of Automobile Dealers Associations (FADA) awaits clarity on Madras High Court order on bumper-to-bumper insurance for vehicles, the association’s president Vinkesh Gulati on August 27 said, the cost of insurance of cars and two-wheelers may go up significantly.
“For a car that starts around Rs 3 lakh to Rs 4 lakh, insurance cost may be about Rs 50,000-Rs60,000 plus,” he told CNBC-TV18. He added that the biggest problem is for entry-level two-wheelers as the vehicle acquisition cost will go up by Rs 7,000-Rs 8,000.
Gulati’s remark comes a day after the Madras High Court recommended making bumper-to-bumper insurance mandatory for new vehicles bought September 1 onwards. This should be in addition to covering the passengers and owner of the vehicle along with the driver for a period of five years, the court said.
Commenting on the ruling, the FADA president said, “The Madras High Court has not made it mandatory; it has suggested that it should be made mandatory. We are still awaiting our legal sources to confirm that.”
Gulati said the increased cost of vehicles and insurance may be a big problem for the customer in a scenario when the acquisition price has already gone up because of BS-VI and a lot of other safety features. “Therefore, the addition of such a big amount will be a very difficult thing for a customer to come up in such challenging times post-COVID,” he added.
The Madras High Court allowed a writ petition from the New India Assurance Company Limited in Avalpoondurai, challenging the orders dated December 7, 2019 of the Motor Accidents Claims Tribunal, Special District Court in Erode. The Insurance company pointed out that the insurance policy in question was only an "Act Policy", which would cover only the risk that might be confronted by a third party to the vehicle and not its occupants. The coverage for an occupant of the vehicle could be extended upon payment of additional premium by the owner of the car, the insurance company contended.
The judge passed the order, which would go a long way in coming to the aid of lots of accident victims. The judge, however, made it clear that this order will not preclude the claimants from claiming compensation for the death of the deceased from the owner of the car, as per the terms of the policy for which the car was insured.
(With PTI inputs)
(Edited by : Kanishka Sarkar)
First Published: Aug 27, 2021 12:33 PM IST
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