Motor insurance coverage gets easier with new IRDAI proposal
The Hindu
There’s good news in the offing for car and two-wheeler owners in India, with the Insurance Regulato
There’s good news in the offing for car and two-wheeler owners in India, with the Insurance Regulatory and Development Authority of India (IRDAI) proposing to allow general insurers to offer long-term motor insurance policies.
Vehicle owners will now have a wider choice, as they can opt for a 3-year insurance policy for private cars and a 5-year insurance policy for two wheelers, both co-terminus with motor third party liability cover. This welcome IRDAI draft proposal comes nearly 3 years after a Supreme Court mandate to allow third party coverage of 5 years for two wheelers and 3 years for cars was withdrawn in August 2020 due to concerns over its implementation.
If you are a vehicle owner looking to buy insurance cover, the proposed ‘Long Term Motor Products covering both Motor Third Party insurance and Own Damage Insurance’ will help you gain peace of mind for a longer time. Currently, new cars can get Third Party cover for 3 years and 2 wheelers can get Third Party cover for 5 years. However, Own Damage Cover for both cars and two wheelers is available for one year. The new proposal could also help vehicle owners avail benefits from insurers for being committed to them for an extended period. * Visit the official website of IRDAI for further details.
In addition, the No Claim Bonus grid specified for the current one-year Motor Own Damage policies will also be applicable for new long-term policies. This means that the NCB applicable at the end of long-term policy tenure will be the same as would have been earned for policies renewed annually. * Visit the official website of IRDAI for further details.
The liberty to withdraw the long-term cover from one company and switch to another is a customer-friendly move. With so many positive changes, vehicle insurance in India has become easier to afford. *
A notice of cancellation will enable either the policy holder or the insurer to cancel the long-term Motor Own Damage Policy during the tenure of the policy. In such a case, the premium will be refunded in full for future year premiums. The refund of pro rate premium will be applicable in case no claims are reported during the year of policy cancellation. *
Policy holders will also get a free look period of 30 days from the date of inception of the policy. In case of cancellation during this period, policy holders can get refund of the premium on pro rata basis. *
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