Big new change: Rs 15 lakh auto insurance mandatory for all-vehicle owners: Here’s what changes for you, Electronics & Gadgets : Today Indya

Latest News

Home
Electronics & Gadgets
Big new change: Rs 15 lakh auto insurance mandatory for all-vehicle owners: Here’s what changes for you

Big new change: Rs 15 lakh auto insurance mandatory for all-vehicle owners: Here’s what changes for you

Wednesday, October 3, 2018 IST

Big changes to insurance policy by the Insurance Regulatory and Development Authority (IRDAI). The premium for insurance for all auto policies is set to go up and the cover for vehicle owners to also go up to Rs 15 lakh. All details

A tragic accident in 2011 that lead to a death of a young man travelling pillion on his own bike when the rider braked suddenly to avoid hitting a cyclist has now made way for a new law. When the wife of the deceased man approached the Motor Accident Claims Tribunal, the jury announced a compensation of Rs 53 lakh under the third-party insurance cover. However, United India Insurance appealed against this order as the insurance cover was only for third-parties and not vehicle owners. Under the policy then only Rs 1 lakh was granted to the vehicle's owners.

The law has now been changed. All vehicle insurance policies will now include personal accident cover worth Rs 15 lakh in case of the death of the owner while driving or riding. This new rule will help the families of accident victims especially two-wheeler riders who are most of the time under-insured. The Insurance Regulatory and Development Authority (IRDAI) in a circular has directed all third-party insurance companies to include this cover to vehicle owners-drivers of all vehicles (two-wheelers, three-wheelers, passenger vehicles and commercial vehicles) for an additional premium of Rs 750 per year (annual insurance policy). This will now be part of the mandatory insurance cover that is a must for all vehicle owners.

This insurance and cover for vehicles have to be included in both comprehensive and third-party insurance for cars and all other vehicles. However, IRDAI further says that respective companies will decide on how to price long-term policies. Currently, it is compulsory for all insurers to provide long-term third-party liability cover of 5 years for bikes and scooter insurance and 3 years for cars and SUVs.

The Madras High Court in October 2017 had ordered IRDAI to hike the personal accident cover then Rs 1 lakh to at least to Rs 15 lakh. The circular further said that the cover is provided to the owner-driver and this includes him travelling as a co-driver. To this, the United India company accepted the Madras High Court's order and said that it was indeed very unfortunate for vehicle owners who also end up paying the premium for risks confronted by the third-party and is not getting any adequate compensation in return. Further, the court also directed the insurance company to provide a higher personal accident cover for the owner of the vehicle who is also the driver.