The Supreme Court has directed a major change in the duration of mandatory third-party motor insurance for new vehicles, increasing the cover period to four years for new cars and six years for new two-wheelers.
The direction was issued by a bench comprising Justice Sanjay Karol and Justice Augustine George Masih, which said the longer insurance period was necessary to improve compliance and road safety.
At present, third-party insurance for new cars is mandatory for three years, while new two-wheelers require five-year coverage. The Supreme Court had prescribed these periods in 2018.
The latest order comes after the court noted that a large number of vehicles continue to operate without valid insurance despite eight years having passed since its earlier direction.
“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,” the court said, as per a Live Law report.
The Insurance Regulatory and Development Authority of India (IRDAI) and General Insurance Council had opposed extending the insurance period. However, the Court said the move was in the interest of road safety.
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56% Vehicles On Roads Remain Uninsured
The Court expressed concern over widespread non-compliance with Section 146 of the Motor Vehicles Act, which makes third-party insurance mandatory for vehicles.
Citing a Parliamentary Standing Committee report, the Court noted that nearly 56% of vehicles on Indian roads remain uninsured. Around 16.54 crore vehicles out of a total 30.48 crore vehicles were found to be without valid insurance.
The court said uninsured vehicles create additional difficulties for accident victims seeking compensation. It noted that victims are often forced to pursue lengthy legal proceedings when the vehicle responsible for an accident does not have insurance.
The court also referred to government data showing that India recorded more than 4.87 lakh road accidents in 2024, highlighting the need for stronger enforcement of the insurance requirement.
Technology To Track Uninsured Vehicles
The Supreme Court also issued several directions aimed at improving enforcement.
It directed that Automatic Number Plate Recognition (ANPR) cameras installed on highways and roads be integrated with the Insurance Information Bureau database and the VAHAN portal.
Such integration could help authorities automatically identify uninsured vehicles and generate e-challans.
The court also suggested exploring technological integration between insurance databases and petrol pumps. Under the proposed system, vehicles without valid insurance could potentially be denied fuel until their insurance is renewed.
State Police personnel should also be provided with handheld devices or applications linked to insurance databases and VAHAN so they can verify insurance status in real time and issue challans where required.
The directions were issued while deciding an appeal filed by National Insurance Company Ltd in a motor accident compensation case. While dismissing the appeal, the Court expanded the proceedings to address wider concerns around motor insurance coverage in India.
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