No insurance, no fuel? Supreme Court pushes pilot plan after finding 56% of vehicles uninsured
The Supreme Court has expressed concern over the large number of uninsured vehicles on Indian roads and asked the Centre to launch a pilot project based on a “no insurance, no fuel” policy.
A bench comprising Justices Sanjay Karol and Augustine George Masih noted that around 56 per cent of vehicles in India are running without valid insurance cover.
Citing a parliamentary committee report, the court said that 16.54 crore vehicles out of nearly 30 crore registered vehicles do not have insurance coverage.
Third-party insurance period extended
The top court also extended the mandatory third-party motor insurance period for newly purchased vehicles.
- Under the new direction:
- Cars must have third-party insurance for four years
- Two-wheelers must have third-party insurance for six years
Earlier, following a 2018 Supreme Court order, new cars were required to have three years of third-party insurance, while two-wheelers needed five years of coverage.
The bench said that despite several years passing since the earlier order, a significant number of vehicles remained uninsured, making it necessary to increase the mandatory coverage period by one year.
Fuel supply may depend on insurance status
The court directed the Ministry of Road Transport and Highways (MoRTH) and the Insurance Regulatory and Development Authority of India (IRDAI) to explore a system where petrol and diesel supply could be restricted for vehicles without valid insurance.
The proposed pilot project aims to:
- Encourage vehicle owners to renew insurance on time
- Help authorities identify uninsured vehicles
- Improve road safety and protection for accident victims
- ANPR Cameras, Apps to Track Uninsured Vehicles
The Supreme Court also suggested linking Automatic Number Plate Recognition (ANPR) cameras installed on roads and highways with insurance databases and the VAHAN portal.
It further directed that:
- Petrol pumps should have systems to verify insurance status
- Police personnel should get mobile apps or devices to check insurance details and issue challans
- Court Calls Insurance a Road Safety Issue
The bench said mandatory third-party insurance is not only about providing compensation after accidents but also about protecting victims from lengthy legal battles.
Calling it an issue connected to the Right to Life under Article 21 of the Constitution, the court said timely insurance coverage ensures accident victims receive financial support without unnecessary delays.
Four-tier motor insurance model suggested
To simplify insurance policies for customers, the court endorsed a four-level structure:
- Mandatory third-party insurance
- Optional legal liability cover for passengers and pillion riders
- Optional personal accident cover for owners, drivers and passengers
- Optional vehicle damage cover
The court also directed insurance companies to explain policies in simple language and clearly inform customers about additional coverage options.
Case background
The ruling came while hearing a case related to the death of a man travelling in his insured vehicle during a road accident.
The Supreme Court upheld a Telangana High Court order directing payment of ₹10.05 lakh compensation with 7.5 per cent interest to the deceased man's family.
The court observed that comprehensive motor insurance covers vehicle owners as well and said claims should not be rejected through an overly technical approach.
The concerned authorities have been asked to submit compliance reports by August 14, with the next hearing scheduled for August 18.
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