What The New Motor Vehicle Bill Does For Your Safety On The Roads

Posted by Nidhi Mahajan in Health and Life, Society
June 26, 2017

In the highly populated India, road accidents are a major cause of death on a large scale. According to the Government of India, close to 1.5 lakh people die each year in road accidents. Overall, more than five lakh road accidents take place in the country.

What could be the cause behind such a huge number of road accidents in India? Well, the answer is the lack of discipline in driving as well as the lack of proper execution of various safety measures. As a result, Indian roads have become accident-prone areas.

The Amendments In The Motor Vehicle Act

Recently in the Lok Sabha, the Government of India passed the Motor Vehicle Amendment Bill 2016 in an effort to improve road safety. The new bill recoups some key amendments in the country’s 30-year-old act regarding motor vehicles, aimed at revamping the law governing the country’s transportation to minimise the violation of traffic laws and improve driving discipline on the roads. This amendment criterion includes third-party insurance cover as included under motor insurance policies sold in India.

Third Party Insurance

Third-party insurance is mandatory for every vehicle, as it covers liabilities arising from any injury or damage to a person or property in the surroundings due to an accident. Since a road accident is a common phenomenon, particularly in India, one needs to understand the amendments because they are quite important for us. The fault might not be yours in an accident; however, you could still get involved due to the third-party damages.


The primary amendment in the rulebook of the Motor Vehicle Act is the increase in penalties for traffic rule(s) violations. This includes a hike in the penalty (from ₹1000 to ₹2000) for plying a vehicle on the road without a valid car insurance policy. The rulebook also includes the timeline for quick processing of third-party motor insurance claims. The victim can raise a claim within six months of the happening the incident, and the insurance company has to process the claim application and make an offer to the particular claimant in no more than 30 days of receiving the required information/documents.

The insurer has to make the complete payment within 30 days of acceptance of the claim by the claimant. The case is transferred to the tribunal for a hearing to be scheduled in case of rejection of the claim amount by the claimant.

In case an individual doesn’t have a valid car insurance policy, they can quickly purchase one online. An online insurance aggregator like policybazaar facilitates hassle-free insurance comparison, thereby enabling an individual to buy the best plans offered by leading insurers in the country.

Quick Disbursal

The government of India has taken steps to ensure a relook at the payment structure and a quick disbursal procedure at the same time. A minimum of ₹2.5 lakh to ₹5 lakh has been fixed as compensation for death, in cases where the party driving is not the party at fault. On the other hand, unlimited compensation and liability are to be granted by the bill, in a case where the person driving is proved to be the party at fault. The compensation in hit-and-run cases has also been increased, i.e. from ₹25,000 to ₹2 lakh, in the case of the death of the victim. Similarly, the compensation is now ₹50,000 in case of grievous injuries, increased from the previous ₹12,500.

Through the amendments in the rulebook of the Motor Vehicle Act, the Government of India has tried to bring in some major changes in the structure of compensation for third-party motor insurance. And for once, this is quite a positive and effective attempt at streamlining the process a little.