Here’s why insurance players aren’t too happy with the Motor Vehicles (Amendment) Bill
- The Motor Vehicles (Amendment) Bill was tabled by
Nitin Gadkari, the Minister for Road Transport & Highways in the Lok Sabha.
- It has one hiccup for the Indian insurance industry – unlimited cap on third party insurance liability.
- The earlier version of the Bill had capped the liability at ₹10 lakh but that has been removed.
The earlier version of the Bill, which has been three years in the making, had capped the liability at ₹10 lakh.
“The earlier proposed capping on claims amount for a third-party liability cover has been removed and currently stands at an unlimited amount. This might lead to increased perceived value of third party insurance but might lead to very high losses,” said Animesh Das, Head of Product Strategy,
The compensation for hit-and-run cases is increased to ₹2 lakh in case of a death, from the existing ₹25,000, added Das.
The Motor Vehicles (Amendment) Bill was tabled by Nitin Gadkari, the Minister for Road Transport & Highways in the Lok Sabha. The Bill hopes to change the way Indians drive on the roads. It also introduces heavy penalties for offenders. The Bill is also set to constitute a Motor Vehicle Accident Fund, which would provide compulsory insurance cover to all road users in India.
And, there are also benefits for
“The fine for not carrying a valid insurance is also increased to ₹2000. This shall lead to increased awareness and higher insurance penetration,” said Das.