The amendment, proposed by the, Road Transport and Highways ministry, to the motor vehicle’s act, 1988, suggests the reduction of liability of insurance companies to a maximum of Rs 10 lakh in case of accidents.
Presently, insurance companies compensates those injured or families of victims as per the decision of the claim’s tribunal, on behalf of the owner.
However, the bill for the amendment to the act provides for stringent punishment for various offences including speeding and drink driving.
Currently, the entire compensation is paid by the insurance company. According to the proposed amendment the insurance company will share the liability with the owner and pay compensation only up to Rs 10 lakh. And rest will have to be borne by the owner of the vehicle involved in the accident.
The proposed amendment also omits the provision of immediate compensation. The present law provides for immediate compensation of up to Rs .50, 000 to those injured or to the families of the victims of accidents for treatment or even performing the last rites.
The bill for the amendment was passed by Rajya Sabha in May 2012. And now it is pending for consideration in Lok Sabha.
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