The Centre is discussing a plan to change the way auto insurance is offered in India. According to a report in Mint, vehicles travelling on highways may be offered on-the-spot insurance cover using the Fastag account. Currently, 40-50 per cent of all vehicles in India are uninsured.
Also, the Centre may also come up with a plan to provide third-party insurance coverage for motor vehicles when they are impounded by traffic police or transport department officials. Handheld devices and the Vahan app may also be used.
"The hand-held devices with police and transport department officials would not only check for insurance status of vehicles using the road and highway ministry's Vahan app but also provide instant third-party insurance options with relevant policies of general insurers linked with the transport department's network," an official aware of the matter told Mint.
"For instant payment of premium for on-the-spot policies, insurance companies could also be brought to the Fastag platform along with banks, with the premium getting deducted from Fastag balance," the official added.
The premium for third-party insurance depends upon the size and age of the vehicles. It ranges from Rs 2,072 for 1000cc vehicles to Rs 3,221 for 1000-1500cc vehicles and Rs 7,890 for vehicles above 1500cc. The on-the-spot insurance was also discussed in the recent General Insurance Council (GIC) meeting, Mint added.
The insurance regulator, IRDAI, has already allowed insurers to issue temporary, short-term motor insurance for impounded vehicles in India. It might be extended to a full third-party cover.