Uninsured Vehicles Would Be Denied Fuelling and Use of FASTag Lane Under The New Norm

The new norms are considering strict measures to drive in compliance under the mandatory third-party vehicle insurance. The possible regulations include blocking refuelling and FASTag lane by uninsured vehicles, linking vehicle-related services with proof of insurance coverage for the vehicle, among others.

Impact of FASTag Lane Regulations on Uninsured Vehicles

The Finance Ministry recently advised the Ministry of Road Transport and Highways in a directive to not renew the driving licenses of owners of uninsured vehicles whose vehicle insurance has either lapsed or become due for renewal. These moves are aimed at countering growing anxiety over an enormous number of uninsured vehicles roaming the Indian roads.

Under the Motor Vehicles Act of 1988, third-party insurance becomes mandatory for any vehicle in the country. While this will essentially cover damage incurred to third parties in accidents, one would believe this is the default scenario. IRDAI, on the other hand, estimates that almost half of the 35-40 crore vehicles in the country are still un-insured.

Driving without third-party insurance attracts a fine of ₹2,000 or imprisonment up to three months for first-time offenders while the penalty is doubled to ₹4,000 for repeat offenses. Yet, compliance levels are notoriously low and the government has been forced to think about stronger enforcement action.

The new proposals could then link routine services of vehicles, which include repairs and maintenance, with valid insurance coverage. Service centers and garages will be required to verify the insurance status before services are provided.

The other way is through the electronic toll collection system, FASTag, which is used by most people. Vehicles without valid insurance may be barred from accessing FASTag-enabled lanes, ensuring that only insured vehicles benefit from these digital services.

The Parliamentary Standing Committee has suggested that the database of e-challans and state databases be integrated in order to monitor the whole process of vehicle registration and insurance for enforcement purposes. Improved data-sharing with state governments and union territories might ensure stricter enforcement and reduce the number of uninsured vehicles on the road.

The government is also looking into integrating insurance verification with digital platforms such as FASTag to make compliance monitoring easier. This would make the system more efficient and user-friendly, making vehicle owners more likely to stay insured.

All these proposed regulations reflect the government’s commitment to improving road safety by ensuring accountability among vehicle owners. More than 50% of vehicles are uninsured, and these measures will help bring about much-needed reform to the insurance sector while protecting users of the roads.

If the proposals of the Finance Ministry are implemented, then that would be a big step towards reducing the risks associated with uninsured vehicles and would ensure all road users are well protected.