It is imperative that one takes care of their vehicle and secure it financially. The Insurance Regulatory has been working on making motor insurance a simpler product. Various measures have been proposed by IRDAI. If these become law, they will only benefit the policyholders.
Given below are proposed IRDAI recommendations and ways they might have an impact on your motor insurance in the future:
- Renewal of standalone own damage policy
It has been recommended by the regulator that the expiry of the standalone OD cover must not be later than the liability policy’s expiry. Details of the liability policy such as the policy number and period, name, etc. must be captured in the OD policy schedule.
This means that after a few months if you purchase a standalone OD policy, but not with the long-term insurance policy, then the expiry date of the standalone OD policy won’t match with the third-party insurance expiry date.
- A standardized grid for NCB
A standardized NCB grid has been recommended by the IRDAI for long-term motor insurance policies. For long-term policies, each insurance provider is defining its NCB slabs for customers when they want to switch insurers to avail NCB benefit, which is a daunting task.
- Compulsory Deductible to now be Standard Deductible
It has been recommended to change the name of ‘Compulsory Deductibles’ to ‘ Standard Deductibles’ by the IRDAI, and there must also be no waiver of the standard deductible, suggesting a revised deductible ruling.
- Insurance policy for passengers
As per the IRDAI, every occupant traveling in the motor vehicle must have medical expenses coverage of Rs.25,000 that arise out of an accident to the vehicle insured under the basic policy. Having such coverage is always nice, but it might make the car insurance of the vehicle owner costlier.
- The calculation of sum insured for private cars
For private cars that are also new, the sum insured will depend on the on-road vehicle price, road tax/registration, as well as manufacturer accessories. If there is a case of theft, you will receive a replacement of the insured vehicle with a new vehicle but the same variant, specifications, make, model, color, subject to availability. You will also receive basic insurance on the new vehicle in the form of Return to Invoice’ add-on. You can even purchase motor insurance online, sitting in the comfort of your homes.
- Surrendering registration certificate to avail of theft claim
It is recommended by the regulator that in case of total loss/ constructive total loss claims and theft claims, the Registration Certificate (RC) of the vehicle must be canceled and the claim must be settled only after the insured surrenders the canceled RC. The premium won’t be returned on policy cancellation.
- Depreciation rule for claim settlement
The previous rules of depreciation for various parts of the vehicle confused the customer. The new rule is somehow better, as a standard grid is proposed for depreciation on all parts in case there is a partial loss, based on the age of the vehicle. According to this, the rate of depreciation will be charged while settling the claim.
- ‘Named Driver’ insurance
The ‘Named Driver Policy’ has been recommended as an option for a private car as well as two-wheeler policies. This has proven to be a good move taken by the regulator as the details of the driver may be incorporated in the policy schedule. The move may also solve various issues that are faced during the policy cycle such as claims, change in ownership, renewal, etc. and avoid insurance providers to avoid fraud claims.
- A third-party premium category for electric vehicles
A separate third-party insurance category for electric vehicles (EVs) was issued. The third-party motor insurance premium for an electric vehicle is issued for a concession of 15 percent, so the sale of EVs will increase.
Lastly, make sure to compare the policies online before buying and use the motor insurance calculator to get an approximate premium amount for better comparison.