MAJOR RELIEF to new car buyers! Madras High Court to MODIFY bumper to bumper mandatory insurance coverage
The High Court will make changes in its order dated 4th August and remove the requirement of simultaneous insurance for 5 years.
There is big news for new car buyers, the Madras High Court order of 5 years bumper to bumper insurance will not be necessary for buying a new car now.
Bumper to bumper insurance is the type of car insurance that offers complete coverage to the vehicle irrespective of the depreciation of its parts.
Considering the arguments of the Association of General Insurance Companies, Auto Companies, Association of Insurance Agents, the Madras High Court will make changes in its order dated 4th August and remove the requirement of simultaneous insurance for 5 years.
During today's hearing, the court clarified that the aim is only passenger safety and that no other port is intended. The court said in its observation that the old order will include the suggestions of the court and the rule of making necessary will be left to the law-making Parliament.
On the purchase of a new vehicle, the cost of vehicles was increasing from Rs 50,000 to Rs 200,000, which was also opposed by the auto companies, after taking the necessary bumper to bumper insurance for 5 years.
This is a big relief to the buyer of a new car as there will be no big burden of insurance. As of now, the 5-year bumper to bumper insurance will not be necessary on the new vehicle.
Madras High Court will modify its August order on the same. Now only the suggestion of the court will remain, and the rule to make it necessary will be left to the Parliament.
On September 1, the court had sought suggestions on the challenge of implementing the rules.
Many organisations including auto companies, IRDA had given suggestions to the Madras High Court.
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In August, the order for bumper-to-bumper insurance for 5 years was passed on the purchase of a new vehicle. Implementing 5 years of insurance together was challenging as the purchase of a new car becomes expensive.
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