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Cap on Insurance Amount against Victims of Road Accidents to Be Reviewed

Karen Menezes Karen Menezes 29 August 2016

As per issues raised by the Motor Accident Claims Tribunal, the Motor Vehicle (Amendment) Bill, 2016 which capped insurance compensation to victims has been called for a review.

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A proposal letter has been sent by the BAR association of the Motor Accident Claims Tribunal to the union ministry with respect to amendment in the Motor Vehicle Act 1988. They have raised a request to the Minister of Roads, Transports and Highways stating that the amount of insurance capped towards paying victims of roads accidents should be ascertained only after determining the actual loss of the victims.

As per the Motor Vehicles (Amendment) Bill, 2016 that was introduced by the Lok Sabha on Aug 9, if there were motor vehicle accidents, insurance companies would have to pay an amount that does not exceed Rs. 10 lakh for death and Rs. 5 lakh for grievous injuries to victims under the third-party car insurance policy. However, this bill is yet to be passed.

The capping could cause complete injustice to victims of road accidents as they would find it difficult to recover the compensation from vehicle owners.

Currently, there is no cap on the amount to be paid to victims. The Tribunal decides the amount based on factors such as age, dependency, income of the victim, nature of injuries and medical expenses to be paid by insurance companies.

Such capping can also pressurize vehicle owners who may not be able to bear the expenses. One awaits to see if the proposal by the Tribunal gets accepted.

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Karen Menezes
Written by Karen Menezes
An optimist at heart, Karen loves to see the world through a pair of rose-tinted glasses. An award-winning blogger, she loves to dream with her eyes open. Writing is not her passion, it’s an OCD! If at all she isn’t writing, you can find her shopping online or experimenting with DIY recipes. This lass currently works as a Content Writer at Coverfox.
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