The Madras High Court has made a big decision related to insurance of vehicles on Thursday, August 26, 2021. The court has ruled that "bumper-to-bumper" insurance should be mandatory whenever a new vehicle is sold, from September 1. Bumper-to-bumper insurance coverage refers to own damage coverage.

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As per the information, till now, third party insurance coverage was also necessary for vehicles. This decision of the court is also a big news for the general insurance companies as they will benefit a lot due to increase in own damage premium.

 

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Now, the car owners will have to pay a huge sum of amount for own damage premium instead of third party premium.

The bumper-to-bumper insurance must be in addition to covering the driver, passengers and owner of the vehicle, for a period of five years, as per a report by PTI.

 

Thereafter, the owner of the vehicle must be cautious in safeguarding the interest of driver, passengers, third parties and himself/herself, so as to avoid unnecessary liability being foisted on the owner of the vehicle, as beyond five years, as on date there is no provision to extend the bumper to bumper policy, due to its non-availability, Justice S Vaidyanathan said in a recent order, as per the PTI report.

It can be noted that third-party insurance is a type of insurance cover where the insurer offers protection against damage to the third-party vehicle, personal property and physical injury.