No Insurance, No Fuel: Supreme Court Proposes Linking Fuel Supply With Vehicle Insurance

The Supreme Court of India has expressed serious concern over the massive number of uninsured vehicles plying the country’s roads. To address this issue, the apex court has suggested that the Central Government, the Ministry of Road Transport and Highways (MoRTH), and the Insurance Regulatory and Development Authority of India (IRDAI) implement a ‘No Insurance, No Fuel’ policy as a pilot project.

Noting that nearly 56 percent of registered vehicles in the country currently lack valid insurance, the court highlighted that this alarming trend severely undermines the compensation system for road accident victims. To automatically identify uninsured vehicles, the court recommended linking Automatic Number Plate Recognition (ANPR) cameras with the central ‘Vahan’ database. Furthermore, it suggested equipping traffic police with dedicated mobile apps or handheld devices, issuing e-challans to violators, and developing a system where citizens can verify a vehicle’s insurance status and report compliance issues. The court also called for the strict enforcement of heavy fines for driving without active insurance.

In a significant directive to the IRDAI, the Supreme Court ordered an increase in the mandatory third-party insurance period. For new private cars, the tenure should be extended from the current three years to four years, and for new two-wheelers, it should be increased from five years to six years.

The bench emphasized that motor insurance policies must be made simpler and easier for consumers to understand. Insurance companies are now required to clearly explain optional covers—such as personal accident, passenger protection, and vehicle damage—alongside the mandatory third-party cover. Additionally, to minimize delays in settling road accident compensation cases, the court directed enhanced coordination between police officials and Motor Accident Claims Tribunals.

Although these comprehensive directives were issued during the hearing of a motor accident compensation case originating from Telangana, legal and industry experts believe they will pave the way for crucial nationwide changes in motor insurance implementation, road safety, and the swift delivery of justice to accident victims.