The car insurance in India in 2019 is different because it has undergone major changes during the calendar year 2018. The Indian Institute for Regulation and Development of Insurance (IRDAI) made two important announcements that have made the year very important for the growth of the insurance sector.
The IRDAI has increased mandatory personal accident coverage (CPA) and announced long-term insurance coverage. Let's talk about changes and their impact on you:
The IRDAI announced that as of September 1, 2018, all general insurance companies would offer long-term auto insurance for all vehicles in circulation. In addition, IRDAI also instructed general insurance to increase the sum insured to 15 lakhs under mandatory coverage in the event of an accident.
Personal cover of accident
The IRDAI announced that the insured amount for personal accident risk coverage should be raised to Rs. 15 lakh. Prior to the announcement, the CPA's coverage for two-wheelers was Rs. 1 lakh and it was Rs. 2 lakh for four wheels. The premium for the same has been increased from Rs. 100 for four wheels and Rs. 50 for two wheels to Rs. 750 for all segments.
All general insurance companies have adopted the change and this is mandatory coverage for the first year of the policy. This change was intended to provide financial support and adequate coverage in the event of death or disability due to an accident.
The AMF has also instructed all general insurance companies to offer policyholders the option to purchase CPA coverage for one year or more. This opinion has aroused many reactions, because many insured subscribe to an individual accident insurance policy from another insurance company. In addition, it has been found that some owners own more than one vehicle and that mandatory coverage with each policy is therefore not required.
Long-term auto insurance
On July 6, 2018, the Supreme Court of India issued an order after which the regulator issued instructions making it mandatory for new cars to take out liability insurance for three years and five years for two-wheeled vehicles. This change was put in place to avoid the problems associated with issuing the policy each year. Many people forget to renew the policy on time, which results in the loss of the no-claims bonus and also breaks the policy.
After analyzing the problems, the IRDAI, for the benefit of customers, issued a new circular in which, as of January 1, 2019, the personal injury component was dissociated from the car insurance policy. This implies that in 2019, auto insurance in India allowed the insured to purchase his car insurance contract from the CPA or purchase a separate contract from the company. d & # 39; insurance. A person should have a CPA policy that will be valid for all vehicles. This implies that coverage has become optional for an individual when underwriting a car insurance policy.
Auto insurance in India has seen many changes in 2019 and IRDAI now allows insurance companies to price products based on the individual pricing method. The regulator also added that he was empowered to issue instructions if he felt that the pricing approach did not respect the principles he had defined.
From now on, the CPA option has become optional and an autonomous CPA is valid for one year and for all vehicles belonging to an individual. Coverage under the CPA policy with auto insurance will only cover permanent disability (total and partial) and death.
In contrast, in a personal accident policy, there is coverage for a car accident and if an individual has this policy, he does not need to purchase a separate CPA cover with his auto insurance. The changes made to the auto insurance have been made considering the benefits to the customer and hopefully they will achieve the same results.
(By Balachander Sekhar, CEO, RenewBuy.com)