Third-party insurance to be mandatory for new vehicles from 1 September 2018

Third-Party new vehicle insurance to be made mandatory from 1 September

– Insurance coverage for four-wheelers should be three years

– Insurance coverage for two-wheelers should be five years


A new Supreme Court ruling mandates that every new four-wheeler and two-wheeler sold in the country from 1 September 2018 should have a third-party insurance. The apex court has passed the ruling to ensure that the victims of road accidents receive compensation and also to encourage the insurance firms to look at it from a ‘human point of view’ and not from a commercial point.


The Supreme Court Committee on Road Safety observed that over one lakh people were dying in India every year in road accidents. In view of the situation, the committee headed by the former apex court judge Justice K S Radhakrishnan,  it was recommended that at the time of sale of two or four wheelers, third party insurance should be made mandatory for a period of five and three years respectively instead of one year. The report further indicates that around 18 crore vehicles were plying on the roads of the country out of which only six crore have third party insurance, and victims of road accidents did not receive compensation as vehicles did not have a third party cover.


The Committee had held detailed discussions with the Insurance Regulatory and Development Authority (IRDA), General Insurance Council, Ministry of Road Transport and Highways and Department of Financial Services, Ministry of Finance and the government of India. Post discussions, the bench came to a conclusion that third party insurance should be made mandatory for four wheelers for a period of three years and for two wheelers, it should be done for a period of five years.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s