PIL seeks insurance cover for private car occupants under 3rd party policies

Lucknow: A PIL has been filed before the Lucknow bench of the Allahabad high court seeking insurance cover for occupants travelling in private car under mandatory standalone third party motor insurance policies.The petition, filed by advocate Dhruv Kumar, a former insurance company branch manager with nearly 30 years of experience in the sector, has made the Insurance Regulatory and Development Authority of India (IRDAI) a respondent.Giving four weeks to the opposite parties to file counter-affidavits and two weeks after that for rejoinders, the bench of Justice Rajan Roy and Justice Manjive Shukla on July 7 ordered the matter to be listed on Aug 24 ‘within top ten cases’.Under the Motor Vehicles Act, every vehicle owner is required to purchase third-party insurance, which covers liability arising from injury, death, or property damage caused to others in an accident. Motorists may either opt for a standalone third-party policy or a comprehensive policy that additionally covers damage to their own vehicle.According to the petitioner, while both categories of policies charge the same premium for the mandatory third-party liability component, they do not provide identical protection.

The PIL contends that occupants travelling in a private car are covered under comprehensive or package policies but are excluded from standalone third-party policies. Consequently, if a passenger suffers injuries or dies in an accident involving a vehicle covered only by a liability-only policy, the insurer may deny the claim, leaving the vehicle owner personally liable to pay compensation.Kumar argues that the anomaly stems from a communication issued by the Tariff Advisory Committee (TAC) in March 1978, which, he claims, narrowed the scope of an earlier TAC board resolution passed in January 1978.

According to the petition, the original resolution envisaged occupant coverage under both comprehensive and third-party policies, but the subsequent communication restricted the benefit to comprehensive policies.

The PIL further alleges that an IRDAI circular issued in 2009 perpetuated the same interpretation.The petitioner has relied on RTI responses and historical insurance records to contend that insurers do not charge any additional premium for extending occupant coverage under liability-only policies, strengthening his argument that such protection should be available under both categories of insurance.According to the plea, the existing framework has created uncertainty among policyholders and insurers regarding the actual extent of coverage available under mandatory third-party insurance.The PIL seeks quashing of the disputed circulars and directions to the IRDAI to extend occupant coverage under standalone third-party policies in accordance with what the petitioner describes as the intent of the original TAC resolution.