Daijiworld Media Network - Bengaluru
Bengaluru, Aug 17: The Karnataka government is set to establish the Karnataka State Motor Vehicle Insurance Corporation, a state-backed body aimed at providing vehicle owners with affordable, simpler and reliable insurance services amid rising premiums and growing difficulties in settling accident claims.
Announcing the move in his Independence Day address, Chief Minister D K Shivakumar said the proposed corporation would address the mounting burden faced by ordinary families.
“The rising cost of motor vehicle insurance and the difficulty of obtaining insurance claims in the event of an accident have become a major challenge for ordinary families,” Shivakumar said.
The proposed corporation could offer vehicle owners an alternative to private insurers, with the government planning simpler documentation, transparent pricing and quicker settlement of claims. For motorists, the initiative could potentially create a more streamlined system covering insurance, accident assessment and claim settlement.
However, several key details about the proposed corporation, including its ownership structure, premium rates, coverage options and the mechanism for processing and settling claims, are yet to be announced.
The move comes at a time when a significant number of vehicles on Indian roads remain uninsured. Third-party motor insurance is mandatory under the Motor Vehicles Act, 1988. The Centre had said in 2023 that 16.54 crore vehicles out of an estimated fleet of 30.48 crore were uninsured, based on available data.
The Supreme Court has also recently intensified scrutiny of the issue. On August 4, the court issued directions aimed at reducing the number of uninsured vehicles and strengthening enforcement of mandatory insurance requirements. It also highlighted the difficulties faced by accident victims when vehicle owners do not have valid third-party insurance.
Third-party insurance protects vehicle owners against financial liability arising from injury, death or property damage caused to another person in an accident. It does not cover damage to the insured vehicle itself.
Karnataka already has a government-backed insurance mechanism through the Karnataka Government Insurance Department (KGID), which provides insurance-related services to state government employees. The proposed corporation, however, is expected to extend its focus to motor insurance for vehicle owners more broadly.
The government is yet to announce when the new corporation will begin operations or when motorists will be able to purchase policies through it.