In an important order, the Madras High Court has ruled that from September 1, whenever a new vehicle is sold, its bumper-to-bumper insurance should be mandatory.
This insurance will be in addition to the insurance covering the driver, passengers and owner of the vehicle for a period of 5 years.
Justice S Vaidyanathan has recently said in his order that after this period, the owner of the vehicle should be cautious in protecting the interests of the driver, passenger and third party as well as himself so that no unnecessary burden is put on them.
This is because bumper-to-bumper insurance cannot be extended for more than five years. Let us tell you that bumper-to-bumper insurance will also cover those parts of the vehicle which are generally not covered by insurance companies.
Auto Insurance Rule: Bumper-to-bumper insurance mandatory for new cars, HC’s final decision
He allowed a writ petition filed by New India Assurance Company Limited challenging the 7 December 2019 order of the Motor Accidents Claims Tribunal of the Special District Court in Erode.
The insurance company said that the insurance policy in question was only for damage caused to the vehicle by a third party and not by the occupants of the vehicle. The insurance company argued that the coverage could be increased if the car owner paid an additional premium.
The judge said that it is unfortunate that when a vehicle is sold, the buyer is not clearly informed about the terms and conditions of the policy and its importance.
Similarly, while purchasing a vehicle, the buyer is also not interested in understanding the terms and conditions of the policy properly because he is more concerned about the performance of the vehicle and not about the policy.
When a customer is ready to spend a huge amount of money to purchase a vehicle, it is surprising why he is not interested in spending a nominal amount to buy a policy for the protection of himself or others.
What is bumper-to-bumper insurance
Under bumper-to-bumper insurance, when a car gets into an accident, the car suffers a lot of damage. In such a situation, the biggest feature of this insurance is that it pays for every part of the car that has been damaged. No matter how small that part is. Overall, 100 percent cover is available under bumper to bumper insurance.