New Car buyers to pay Rs 500 for “Hit & Run” compensation fund

hit and run compensation fund

New car buyers to pay a one-time fee of Rs.500 in Hit & Run compensation fund

Supreme court will be giving a final verdict in April 2019 on imposing a one time fee of Rs.500 on new car buyers. In order to compensate victims in case of death or disability in a hit and run accident, the Supreme Court has accepted the recommendation to increase it to Rs.2 lakh and Rs.50000. The government had initiated in May 2018, by suggesting appropriate amendments in the Motor Vehicles Act to increase the compensation in the hit and run cases, but the bill lapsed. Supreme Court has asked Centre and the apex court’s amicus curiae to submit a framework of the scheme of payment. It wanted the concerned parties to address the points inclusive of faithful distribution of the amount, which may be paid over to the victims of hit-and-run motor accident cases.

The government was fighting for a 10-fold increase in compensation to road accident victims. It was a landmark decision from the government and it had suggested the following changes in the Motor Vehicles Act:

  • Hit and Run case accident victim resulting in death – Compensation to be revised to Rs. 2 lakh from a fixed sum of Rs.25,000
  • Hit and Run case accident victim resulting in permanent disability/grievous hurt  – Compensation to be revised in the range of Rs. 50,000 to Rs. 5 lakh from a fixed sum of Rs.12,500 depending on the extent of the disability
  • Setting up a maximum time limit of 90 days to reimburse the compensation amount to the victims

The compensation amount will continue to be paid from existing solatium fund (managed by General Insurance Corporation) and with this change but the change will result in a burden of Rs. 800 crore annually on government. To handle this it was proposed to create a “hit and run” fund which will collect a one-time contribution from new vehicle owners and the funds will be diverted to solatium fund to compensate the accident hit and run victims. “Hit and Run” fund is borrowed from US concept by name of “Uninsured/Under insured Motorists coverage”. The initiative has its own pros and cons but definitely, a large pool of fund will be created to reimburse victims of at-fault hit and run drivers. One thing is for sure, people do not have an objection in paying a one-time fee provided the compensation amount is being used in the right spirit and at the right time.

Do keep in mind while reading this article that “Hit & Run” cases are those where the victim or authorities cannot trace or identify accused vehicle and driver.

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