The Supreme Court has directed the Central Government, in consultation with the Insurance Regulatory and Development Authority of India (IRDAI), to develop a pilot project that could deny fuel to vehicles without valid third-party insurance.
The proposal, aimed at improving road safety and ensuring compliance with the Government, comes after the court noted that nearly 16.54 crore vehicles, or around 56 per cent of all vehicles in India, are uninsured.
The bench observed that the Ministry of Petroleum and Natural Gas has expressed no objection in principle to the proposal.
Alongside this, the court also ordered several technology-driven measures, including integrating Automatic Number Plate Recognition (ANPR) cameras with insurance databases, increasing the mandatory third-party insurance period for new vehicles, and strengthening on-ground enforcement to protect accident victims and improve compliance.
Road Safety Push Through Technology
A bench comprising Justices Sanjay Karol and Prashant Kumar Mishra said the proposed “no insurance, no fuel” initiative would have a dual benefit by helping identify uninsured or unregistered vehicles while encouraging owners to maintain valid insurance coverage.
The judges directed IRDAI and the Ministry of Road Transport and Highways (MoRTH) to jointly prepare the pilot project, suggesting that ANPR cameras could be used to verify insurance status digitally.
The court also ordered that existing highway and city surveillance systems be integrated with the Insurance Information Bureau and the VAHAN portal to automatically detect uninsured vehicles and issue e-challans.
Additionally, it directed state police forces to be equipped with handheld devices or mobile applications linked to these databases for real-time verification.
The bench further increased the mandatory long-term third-party insurance period from three to four years for new private cars and from five to six years for new two-wheelers, saying the move was necessary in the interest of road safety despite reservations expressed by IRDAI and the General Insurance Council.
The Supreme Court has asked the Centre and IRDAI to prepare a pilot project that could deny fuel to vehicles without valid third-party insurance.
— The Logical Indian (@LogicalIndians) August 5, 2026
The direction comes after the court noted that nearly 16.54 crore vehicles in India are uninsured despite third-party insurance being… pic.twitter.com/lswltDZo22
Why The Court Stepped In
The directions were issued while deciding a long-pending motor accident compensation case that highlighted gaps in insurance coverage for road users.
The court observed that Section 146 of the Motor Vehicles Act makes third-party insurance mandatory, yet compliance remains alarmingly low despite earlier Supreme Court directions issued in 2018.
Referring to the Parliamentary Standing Committee on Finance’s 2024-25 report, the bench described the situation as “shocking”, noting that more than half of India’s vehicles continue to operate without valid insurance.
It also recommended a simplified four-tier insurance structure, including optional add-ons such as own-damage cover, personal accident cover and occupant protection, while directing insurers to display policy benefits in a more accessible format.
The judges emphasised that compulsory insurance is not merely a legal formality but an essential safeguard to ensure timely compensation for victims of road accidents and reduce lengthy legal disputes.
The Logical Indian’s Perspective
Road safety is a shared responsibility that extends beyond traffic rules to ensuring justice for accident victims. The Supreme Court’s recommendations seek to address a significant compliance gap while encouraging the use of technology to strengthen enforcement.
However, any future implementation must remain transparent, accessible and citizen-friendly so that it improves compliance without creating unnecessary hardship for motorists, particularly those in remote and underserved regions.
Alongside stricter enforcement, governments and insurers should invest in public awareness, affordable insurance products and simple renewal systems to ensure that compliance becomes easier rather than merely punitive. As India looks to reduce road fatalities and improve accountability, how can policymakers strike the right balance between strict enforcement and making vehicle insurance more accessible for everyone?
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