Madras High Court has passed the judgement which makes it compulsory for all cars to have bumper-to-bumper insurance at the time of purchase. The ruling came on Thursday and has received some mixed reactions from the customers and insurance companies. This rule will come into effect from September 1. The owner will have to buy the B2B insurance for a period of 5 years at the time of registration. The aim is to safeguard the coverage of damage to the vehicle and its components in case of an unfortunate accident. In addition to that, this insurance policy will cover the safety of the driver, occupants and the owner of the car as well. Here is where things get a bit complicated.
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Compulsory Bumper-to-Bumper Insurance Cars
Now, this decision is taken to ensure high standards of safety for everyone involved in an accident. This extends an added layer of protection to the passengers, driver and the owner. In case of bumper-to-bumper insurance claims, the insurance companies have to payout the entire expense of the damage to the car. Now, they will also have to cover the occupants. While this is definitely a better bargain for the customers and incorporates many facets of an accident, it also means that it will come at a substantially higher premium. This could range between 10% to 20% and is also mandatory. This will result in another burden at the time of purchase and will have to be borne by the customers. That is where the problem lies.
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Also, the insurance companies argue that while the insurance must cover the damage to the car and its components, why should they extend the cover to the occupants, driver and the owner of the car. That is the cause behind mixed feelings of customers and insurance companies. After the initial tenure of 5 years, the HC directs the owners to ensure the safety of drivers and occupants. However, in the long run, rules like these will only ensure a greater degree of safety on Indian roads. This compulsory bumper-to-bumper insurance policy for cars could turn out to be a great first step in that direction.
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Source: News18
