Bumper-to-bumper insurance order put on hold by high court

Bumper-to-bumper insurance order put on hold by high court

Ram.Sundaram@timesgroup.com

Chennai:02.09.2021

A Madras high court order making the fiveyear bumper-to-bumper insurance mandatory for all new vehicles from September 1, was put on hold by the court on Wednesday.

Justice S Vaidyanathan, who passed the order last week, kept it in abeyance after insurance companies filed a memo saying they needed at least three months to design a new insurance product as per the directions of the court.

Meanwhile, the joint transport commissioner, A A Muthu, had directed all Regional Transport Offices (RTOs) across Tamil Nadu not to register any vehicles without bumper-to-bumper insurance coverage, as directed by the high court.

This uncertainty over the new insurance rule forced Tamil Nadu automobile dealers to put documentation works pertaining to vehicle registration on hold.

Automobile dealers and insurance companies wondered how the order could be implemented without consulting the Insurance Regulatory Authority of India (IRDAI), the government body which supervises the insurance sector.

"Since there was no clarity on how to finalise the insurance premium amount, we did not prepare any insurance certificates today (Wednesday). We will be meeting the state transport authorities and request them to reverse their earlier order" said S Rajvel, state chairperson of Federation of Automobile Dealers Association (FADA).

"Usually, automobile dealers bring new vehicles to RTOs for registration only after preparing insurance certificates. It takes two or three days for them (from the date of invoice) to finish this insurance documentation. So, all new vehicles, which arrived today at RTOs, were sold to customers before the high court deadline of September 1. The new insurance rule was not applicable to any of these vehicles. Therefore, it was regular business at most city RTOs," said a Chennai RTO, requesting anonymity.