Supreme Court orders tech-driven crackdown on India's 16.54 crore uninsured vehicles
Justices Sanjay Karol and Prashant Kumar Mishra directed ANPR-based e-challans, a four-layer policy structure, and extended new-vehicle third-party cover to enforce mandatory motor insurance.
What began as an insurer’s appeal against a Rs. 10,00,500 accident award grew into a wide inquiry into why so many vehicles on Indian roads carry no insurance. A division bench of Justices Sanjay Karol and Prashant Kumar Mishra used the appeal to frame two issues: the lack of compliance with Section 146 of the Motor Vehicles Act, 1988, which requires third-party cover for every vehicle, and whether a uniform policy structure covering all occupants should exist alongside mandatory third-party risks. The Court impleaded twenty-two insurance companies, the Insurance Regulatory and Development Authority and the Ministry of Road Transport and Highways, and on 4 August 2026 issued directions in the public interest while dismissing the insurer’s challenge to the compensation.
How a single accident claim expanded into a policy inquiry
The underlying facts are narrow. On 13 July 1996, Mr. T. Ramu was returning from Tirupathi to his village in his Maruti 800 when an unknown lorry struck the car from behind near Singarayakonda around 5:00 AM. He died during treatment. His legal representatives sought Rs. 10,00,000 before the MACT at L.B. Nagar, Hyderabad.
The Tribunal, on 8 December 2009, denied compensation, relying on testimony that no extra premium had been paid to cover the owner’s personal risk. The High Court of Telangana reversed this on 30 July 2024, awarded Rs. 10,00,500 with 7.5% interest, and held that the comprehensive policy covered the owner travelling as a passenger. The insurer then approached the Supreme Court.
The Court noticed a larger problem behind the appeal. Notice issued on 24 March 2025 was followed by orders impleading insurers on 9 September 2025, IRDA on 13 October 2025, and MoRTH on 30 October 2025. Stakeholders were asked to confer and file supplementary affidavits.
The scale of non-compliance the Court confronted
The Court recorded that nearly 56% of vehicles on Indian roads remain uninsured, per the Standing Committee on Finance 2024–25 report of December 2024. In absolute terms, that is 16.54 crore uninsured vehicles out of 30.48 crore. Road accidents stood at 4,87,705 in 2024, and MoRTH data showed 22% of accidents involve uninsured vehicles.
The bench tied the issue to fundamental rights, citing its own observation in In Re: Phalodi Accident v. National Highways Authority of India that the right to life under Article 21 is a positive mandate on the State to ensure a safe environment. It also referred to the Patna High Court’s holding in Abhijeet Kumar Pandey v. State of Bihar that a right to safe travel flows from Articles 19(1)(d) and 21.
The directions on uninsured vehicles
The Court held that enforcement must be integrated with technology, noting consensus among all stakeholders. It directed that ANPR cameras on highways and roads be integrated with data from the Insurance Information Bureau and the VAHAN portal to issue automatic e-challans to uninsured vehicles, in line with the SOP for Electronic Monitoring and Enforcement of Road Safety.
State Police, the Court noted, currently have no uniform mechanism to verify insurance on the ground. It directed that handheld devices or downloadable apps, linked to the Insurance Information Bureau and VAHAN data, be supplied so real-time insurance status can be checked and challans imposed. On notification of the amendment to Section 196 of the Act, which imposes progressive fines, strict compliance was directed.
The bench also asked IRDA, with MoRTH, to evolve a pilot project linking fuel supply to valid insurance status, so vehicles without cover would be refused fuel at petrol pumps. The Ministry of Petroleum and Natural Gas had in principle no objection. A separate pilot allowing citizens to verify insurance status was also directed.
A four-layer policy structure and longer mandatory cover
On the second issue, the Court adopted IRDA’s suggested four-layer structure for private vehicles: a base third-party only policy under Section 146; an optional cover for occupants and pillion riders; a personal accident cover for owner, driver and occupants; and an own-damage cover. Pricing of the base policy will be fixed through a consultative process between IRDA and the Central Government, while other pricing is left to insurers.
Every customer must be issued a “customer option form” at purchase, offline or online, allowing opt-in to add-on covers, along with a mandatory consumer-friendly information sheet. IRDA, with the General Insurance Council and insurers, is to formulate uniform policy wordings for the optional covers.
The Court revisited its 2018 direction in S. Rajaseekaran v. Union of India mandating three-year cover for new cars and five-year cover for new two-wheelers. Finding that eight years later a large number of vehicles remain uninsured, and despite IRDA and GIC recommending against enhancement, the bench extended the periods. Henceforth, four years’ third-party insurance for new cars and six years for new two-wheelers must be purchased, with IRDA to issue directions immediately.
Directions on delayed motor accident claims
Acting on submissions by senior counsel Mr. J.R. Midha, the Court addressed pendency in MACT cases, referring to Shishu Pal @ Shish Ram v. Surjeet, which noted over four years’ pendency in more than half of motor accident claim cases, and to directions in General Insurance Council v. State of Andhra Pradesh and M.R. Krishna Murthi v. New India Assurance.
For accidents before 31 March 2022, where petitions remain pending due to service or documents, the Court directed State Police to promptly file the Detailed Accident Report with the FIR, MLC, post-mortem report, insurance policy and permit before the concerned MACT, and to assist with service and production of witnesses. The registry was directed to forward these directions to the Secretary, High Court Legal Services Authority of all High Courts, for onward transmission to State Police.
Order
On the appeal itself, the Court held that courts should not adopt a hyper-technical approach in motor accident claims. Relying on the IRDA circular dated 16 November 2009, under which insurers are liable to compensate any occupant under a comprehensive or package policy, the bench found no reason to disagree with the High Court and dismissed the civil appeal to that extent.
All stakeholders were directed to comply with the directions and file responses before 14 August 2026. The matter was listed for perusal of compliance affidavits on 18 August 2026 at 2 PM. The appeal was disposed of, and pending applications closed.