In a significant move aimed at improving road safety and ensuring compensation for accident victims, the Supreme Court on Tuesday directed the Central Government and the Insurance Regulatory and Development Authority of India (IRDAI) to prepare a pilot project under which vehicles without valid third-party insurance may be denied fuel at petrol pumps.

A Bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra also ordered an extension of the mandatory long-term third-party insurance period for new vehicles. The compulsory insurance cover for new cars has been increased from three years to four years, while for new two-wheelers it has been extended from five years to six years.

The court directed IRDAI to issue the necessary guidelines without delay.

Court Cites Rising Number of Uninsured Vehicles

The Bench observed that despite the introduction of mandatory long-term third-party insurance in 2018, a large number of vehicles continue to operate without valid insurance.

The judges noted that extending the mandatory insurance period by one year would strengthen financial protection for road accident victims and improve compliance with motor insurance regulations.

With the revised rules, buyers of new vehicles will have to pay a higher upfront premium while purchasing their vehicles to cover the extended insurance period.

Pilot Project to Link Fuel Purchase with Insurance

The Supreme Court asked the Centre and IRDAI to examine the feasibility of a pilot project that would prevent uninsured vehicles from purchasing fuel.

The proposal is intended to improve compliance with mandatory third-party insurance requirements and reduce the number of uninsured vehicles on Indian roads.

The court did not order an immediate nationwide rollout but asked authorities to begin with a pilot programme before considering wider implementation.

Technology-Based Enforcement Suggested

The Bench also recommended greater use of technology to identify uninsured vehicles and strengthen enforcement.

Among the directions issued by the court are:

• Highway surveillance cameras should be integrated with the Insurance Information Bureau (IIB) database and the VAHAN vehicle registration portal.

• Selected highways should adopt automated vehicle identification systems in place of conventional toll-based monitoring.

• Cameras should automatically detect uninsured vehicles and generate electronic challans.

• Police personnel should be provided with mobile applications or handheld devices to verify vehicle insurance status in real time.

• Citizens should also be given access to an online platform where they can check whether a vehicle has valid third-party or comprehensive insurance coverage.

More Than Half of Vehicles Allegedly Uninsured

The court referred to findings of a Parliamentary Committee, which reported that 16.54 crore out of India's 30.48 crore registered vehicles do not have valid insurance.

The figures indicate that nearly 56 per cent of vehicles on Indian roads are operating without mandatory insurance cover, raising concerns over compensation for victims of road accidents.

Focus on Road Safety and Victim Protection

Third-party motor insurance is mandatory under Indian law as it provides compensation to individuals affected by road accidents involving insured vehicles.

The Supreme Court's latest directions aim to improve compliance, strengthen enforcement through digital monitoring, and ensure greater financial protection for accident victims while encouraging responsible vehicle ownership.