On Friday, in view of the high order risk vehicle owners are exposed to, it has enhanced the compulsory personal accident cover available with motor insurance from Rs. 1 lakh and Rs. 2 lakh for two and four-wheeler respectively to Rs. 15 lakh for both.
Now, the insurers will have to issue a revised policy seeking additional premium of Rs. 750 per annum on an immediate basis.
Also, there has been a call to buy extended third-party coverage of upto 3 years and 5 years for four and two-wheelers respectively as insured generally are not seeing renew their policy after its expiration. Herein we shall discuss how to get your coverage extended:
When is the cover extended:
It is to be noted that such a cover is mandatory for owner driver who holds a valid DL and in the case when some accident is meted while alighting in or out or while driving the vehicle. It is also provided for when the coverage owner is seated and not actually driving the vehicle.
Also, there is given a leverage to buy additional CSI or compulsory sum insured for an additional premium amount.
For the mandatory long-term third party covers
The regulator has now mandated new vehicle owners to buy the third-party vehicle cover upfront for a longer tenure. This will have benefits for the consumers at large as the impending task of getting the policy renewed every year can be done away with and also with a more pool of insured vehicles on the roads, premium is likely to come down in near future.
Insurers will also stand to gain from the caveat with higher penetration and larger volumes.
Third-party cover provides for a cover in case one's insured vehicle causes some damage to other's vehicle, property or people and does not provides for damage meted out by one's own vehicle or loss due to theft, damage etc.
It is mandatory under the Motor Vehicles Act. And for the insurance industry as a whole, this eats up in their over portfolio due to higher claim and limited premium amount set up by the IRDAI every year.