New Delhi, August 4, 2026 (Yes Punjab News)
The Supreme Court on Tuesday directed that the mandatory third-party insurance period for newly purchased vehicles be extended by one year, requiring new cars to have four-year coverage and new two-wheelers to have six-year coverage at the time of purchase.
A Bench of Justices Sanjay Karol and P.K. Mishra issued the direction while disposing of an appeal filed by National Insurance Company Ltd., observing that a large number of vehicles continue to operate on Indian roads without valid insurance despite earlier court directions.
The court said the move was necessary in the interest of road safety and to improve compliance with the Motor Vehicles Act (MVA), which makes third-party insurance mandatory for all vehicles.
“We notice that despite eight years having passed from the said direction, a large number of vehicles remain uninsured. While the IRDA and GIC have recommended that this period not be enhanced, we are of the view that it is in the interest of road safety that the period be enhanced by one year,” the Bench said.
The court directed the Insurance Regulatory and Development Authority of India (IRDAI) to immediately issue necessary instructions for implementing the extended insurance period.
The Supreme Court was examining broader issues related to non-compliance with Section 146 of the Motor Vehicles Act, which requires every vehicle owner to have third-party insurance, along with the need for a uniform insurance framework covering occupants in addition to third-party liabilities.
In its order, the court noted that nearly 56 per cent of vehicles on Indian roads remain uninsured, defeating the purpose of compulsory insurance provisions. It observed that victims of road accidents and their families are often forced into lengthy legal battles to obtain compensation.
During the proceedings, IRDAI and the General Insurance Council had opposed extending the mandatory insurance period, arguing that longer-duration policies could increase premiums and had not significantly reduced the number of uninsured vehicles.
The Supreme Court, however, disagreed and held that extending the insurance duration was required in the larger interest of road safety and public welfare.
The Bench also approved a four-layer insurance structure for private vehicles. The framework includes mandatory third-party insurance, optional legal liability cover for occupants or pillion riders, optional personal accident cover for the owner-driver and passengers, and optional own-damage cover.
The court directed that every motor insurance purchaser, whether buying a policy online or offline, must be provided with a mandatory “customer option form” allowing them to choose additional covers through a checkbox-based system.
It further directed IRDAI to prepare uniform policy wording for optional covers and ensure that insurers provide a consumer-friendly information sheet explaining the four-layer structure and clearly distinguishing between mandatory and optional benefits.
To address the issue of uninsured vehicles, the Supreme Court ordered integration of Automatic Number Plate Recognition (ANPR) cameras with the Insurance Information Bureau and VAHAN database for automatic detection of uninsured vehicles and issuance of e-challans.
The court also directed state police departments to be equipped with handheld devices or mobile applications connected to insurance databases to enable real-time verification of insurance status.
The Bench asked IRDAI and the Ministry of Road Transport and Highways to develop pilot projects allowing citizens to verify vehicle insurance status and explore linking fuel supply at petrol stations with valid insurance coverage to improve compliance.
Emphasising the role of technology in enforcement, the court said existing offline systems must be integrated with digital platforms to ensure effective implementation of mandatory insurance laws.
On the specific case before it, the Supreme Court dismissed National Insurance Company Ltd.’s appeal against a Telangana High Court order awarding compensation to the legal heirs of a deceased vehicle owner. The apex court held that a comprehensive insurance policy covered the owner while travelling in his own vehicle.
The Bench said courts dealing with motor accident claims should not adopt a hyper-technical approach and upheld the High Court’s finding that the insurer was liable under the comprehensive policy.
The Supreme Court directed all stakeholders to comply with its directions and submit affidavits by August 14. The matter will be taken up next on August 18 for consideration of compliance reports.
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