Greeva Garg –
Published on: September 14, 2021 at 14:30 IST
Madras High Court has granted relief to new car buyers by ordering that 5-year bumper-to-bumper insurance coverage is not mandatory on new vehicles.
Bumper-to-Bumper Insurance is categorically a vehicle insurance that covers insurance of the whole vehicle irrespective of its depreciation.
Earlier the Madras High Court passed the order on August 4, which stated, “Whenever a new vehicle is sold after September 1, 2021, it is mandatory for coverage of bumper-to-bumper insurance every year, in addition to covering the driver, passengers, and owner of the vehicle, for a period of five years.”
In the recent hearing the Court decided to modify its earlier order, after General Insurance Council moved the High court seeking clarifications on the order passed to grant the insurance companies time of 90 days to effect changes in the computer system after due approval from the insurance regulator.
Also, the auto dealers filed an application into the High Court, being anxious because they feared if it were implemented in letter and spirit, owning a new car would become expensive and will result in lowering of sale. This will be the reason for diminution of the Auto Industry that already has been affected by the pandemic.
After considering the submissions of the General Insurance Council and Auto Industrial Companies, the Madras High Court decided to remove the condition of simultaneous insurance for 5 years.
Finally, the High Court said in its observation that the suggestions will now be added to its earlier order by the Court and the necessary rule-making will be effectuated by the Parliament.