On selling any new vehicle from September 1, it should be completely insured (bumper-to-bumper). Madras High Court has said this in an important order.
The Madras High Court, in an important order, said that from September 1, any new vehicle sold must have complete insurance (bumper-to-bumper). This will be in addition to the insurance covering the driver, passengers and the owner of the vehicle for a period of five years. ‘Bumper-to-bumper’ insurance provides 100% cover including the fiber, metal and rubber parts of the vehicle.
Justice S Vaidyanathan, in a recent order, said that beyond this period, the owner of the vehicle should be vigilant to protect the interests of the driver, passengers, third parties and himself, so that no unnecessary liability is imposed on him.
Madras High Court Order
He allowed a writ petition of New India Assurance Company Limited challenging the December 7, 2019 order of the Motor Accident Claims Tribunal of the Special District Court at Erode.
The insurance company stated that the insurance policy in question was only for damage caused to the vehicle by a third party and not by the occupants of the vehicle. The insurance company argued that the coverage can be increased if the car owner pays additional premium.
The judge observed that it is sad that when a vehicle is sold, the buyer is not clearly informed about the terms and conditions of the policy and likewise the buyer is also unable to understand the terms and conditions of the policy. No interest, as he is more concerned about the performance of the vehicle and not the policy.
What is bumper-to-bumper insurance and how does it work?
It is essentially a type of car insurance, which gives you complete coverage of the vehicle. This means that when you face an accident and there is a loss that needs to be covered, the insurer will not deduct the depreciation value from the coverage. Apart from this, the motor insurer will pay the full cost of replacing the body parts of your vehicle. However, this type of insurance does not cover engine damages due to oil leaks or water loss.
Though it gives you a full range of coverage, it should be noted that you will pay higher premium for this type of policy. However, it has other advantages.
It can be availed at the time of buying and renewing the policy. You can also claim the full amount, whereas a standard insurance coverage pays only up to about 40 per cent. This is more beneficial for new cars or vehicles with a maximum age limit of three years.
