The current situation of the demographic set up of the world is of a standstill. In such testing times, it is not just our daily errands but even the whole the organisational set up of legalities and administration that is affected. This is very much the case for the financial sector and legal system as well. It is only the absolutely inevitably unturnable nature of activities which are predicted to be starting to see some progress in the coming days. The deadline of important legal holdings, boundations and any activity associated with them have now seen a relaxation in terms of deadline. In this article, we are going to talk about how the government has delivered this relaxation on third-party vehicle insurance renewal.
What is third party vehicle insurance and its importance?
Third-party motor insurance covers the damages (for the consumer), in case of a car accident or similar vehicle related mishappening to take on the expenses a third party may have incurred due to the insurance holder's fault.
So, in case of an accident, the expenses related to damages (bodily damage or property damage) incurred by a third party will be covered by the firm which has insured the person responsible. It is illegal in India to own and drive a vehicle, damages from which are not insured. Thus, it is compulsory legality of utter importance that needs to be taken care of and has to be followed without a fail.
Under the motor vehicles (amendment) act, if a person is caught driving an uninsured vehicle, he/she is liable to pay an Rs2000 fine. And in the worst case (in case of accidental damage to a third person by an uninsured vehicle), the person is eligible to a legal compulsion to pay for damages from his own pocket. Heavier fines could be imposed and the person may have to face a detention period.
What does the government notification say?
According to a recent government notification, any insurance holder who faces termination of insurance between March 25 to May 3 is qualified for relaxation in terms. This relaxation is enforced by the deadline extension. The new deadline for insurance renewal is May 15th. Now, this step was much awaited, in the light of the current situation but at the same time expected and naturally understood. The notification from the government goes as this
The policyholders whose motor vehicle third party insurance policies fall due for renewal during the period on and from the 25th March, 2020 up to the 3rd May, 2020 and who are unable to make payment of their renewal premium on time in view of the prevailing situation in the country as a result of CoronaVirus disease (COVID-19), are allowed to make such payment for renewal of policies to their insurers on or before the 15th May, 2020 to ensure continuity of the statutory motor vehicle third party insurance cover from the date on which the policy falls due for renewal, so that any valid claim triggered during the grace period can be paid.
This was a much necessary move that was bound to be taken considering the conditions of a lockdown extension. And our team welcomes the decision and appreciates the government for this consideration. We also would like to advise our readers to avoid panic if they are facing a similar bounding situation. Just try to relax and regularly follow updates from the government.
Stay home, stay safe