Govt plans to redefine LMV under Motor Vehicles Act to ease burden on insurers

New Delhi: In a reprieve for insurance firms that are forced to pay compensation in accidents involving light motor vehicle (LMV) license holders driving transport vehicles, the government plans to amend the Motor Vehicles Act to base LMV definition on gross vehicle weight to include payload capacity.

A Supreme Court order of November 2024 had ordered insurance firms to pay accident claims to LMV licensees while driving transport vehicles without a separate endorsement even though the LMV driver was steering a heavier laden transport vehicle.

The SC ruling said that a transport vehicle with an unladen weight not exceeding 7,500 kg fell under the definition of a LMV, and an LMV licensee could drive a transport vehicle of unladen weight not exceeding 7,500 kg. That meant insurance firms could not deny claims for accidents involving these vehicles on the grounds that the driver did not have the proper authorisation.

“The act is being amended to change the LMV definition, base it solely on gross instead of unladen weight of vehicles as the latter is causing severe safety concerns and negatively impacting insurance related cover to citizens in case of accidents,” said an official of the Department of Road Transport.

Unladen weight is the empty weight of a vehicle including its standard equipment and fluids, while gross weight is the total weight of the vehicle when fully loaded, including the unladen weight, driver, passengers, and/or cargo.

While adding new classes of motor vehicles including ‘three-wheelers’ and ‘articulated vehicle’ for endorsement on driving license, the proposed amendment imposes strict actions against habitual offenders by evaluating driver and vehicle errant behaviour before granting/renewing driving license or registration certificates of a vehicle.

The Centre would introduce a system where points would be given every time a learner/driver or a vehicle commits an offence. When accumulated points reach a threshold, penalties would be imposed such as disqualification or suspension or cancellation of license or the vehicle’s registration certificate.

“This challan history of a vehicle would be made available to insurance companies to arrive at the base premium to be charged for their third-party insurance each year,” said the official. To improve road safety for children, new penalty is being introduced where penalties would be double in case of any offence by drivers as well as owners of vehicles carrying juveniles.