After multi-year policies that are available for two-wheeler for some time now, soon you will be able to secure similar kind of policy for your four-wheeler. As per the PTI report, multi-year policies for four-wheelers may come in as the Supreme Court of India has asked IRDAI, the insurance regulator, to decide on making third party motor insurance mandatory by September 1.
The Supreme Court gave the directive in reference to the SC Committee recommendations on road safety which proposes that at the time when two or four wheelers are sold, third party motor insurance be made mandatory for 5 and 3 years, respectively, in place of a single year.
A motor insurance policy notably has two components i.e third party liability cover and own damage. In India, third-party liability cover is mandatory for all registered vehicles and provides for liability arising out of damage to third party or their assets due to one's own vehicle. IRDAI each year fixes the premium amount for this component of motor insurance.
Now that the Supreme Court has given a directive on the recommendations of the committee on road safety, IRDAI will allow insurance players to come up with multi-year policies for cars. Though, the pricing aspect of such a policy will be a big challenger for insurers.
At the time the vehicle is sold, the mandate to secure a five and three-year motor insurance cover for two and four-wheelers, respectively, will ensure that there exists a cover for at least some years as most people refrain from renewing their policies.