Compensation and Interest under MV Act, 1988 : Role of Insurance Company Explained

Compensation and Interest under MV Act, 1988 : Role of Insurance Company Explained

In a recent case [OICL v. Niru @ Niharika [2025] GCtR 1328 (SC)], where insurance company argued that rate of interest of 9% on compensation amount is excessive, dismissing the appeal it was held that there was nothing stopping the Insurance Company from settling the claim on a computation, on receipt of intimation of the accident, especially since the determination of compensation for loss of dependency, on death being occasioned in a motor vehicle accident, can be determined as evident from the judicial precedents; at least provisionally. It was further held that the amounts awarded, if not paid, shall be paid within a period of 3 months and if defaulted shall carry 12% interest on the total amount of award with interest from the date of default.