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Insurance Article

IRDAI Mandates ₹15 Lakh Accident Cover for All Vehicles

September 24 2018

IRDAI has declared that all the motor policies will include personal accident protection. The policies will cover the owner-driver for the sum of ₹15 lakh in case of death due to an accident while driving.

This policy will render support to families of the accident victims, especially the two-wheeler owners who are frequently under-insured. IRDAI has instructed insurance companies to mandatorily add this cover to owner-drivers of all vehicles for an annual premium of ₹750.

The MD and CEO of a leading insurance company believes that this is a good move as it will address the issue of inadequate insurance in India. He stated that “I strongly believe that is vital to have an appropriate personal account cover since it provides much needed financial support to the policyholder and their family members if he/she is disabled or succumbs to injury due to an accident”.

The head of underwriting and claims at ICICI Lombard General Insurance, Sanjay Datta mentioned that “Insurers will have the freedom to offer a cover that is higher than ₹15 lakh. Overall there has to be equity in terms of the compensation that is available to the owner-driver and to third-party victims”.

While travelling pillion on his own bike, P Rajini was killed when the driver moved to avoid hitting a cyclist. His wife approached the Motor Accident Claims Tribunal, which under the third-party cover provided a compensation of ₹53 lakh. The insurer appealed against the order as the cover was provided for third-party and not owners.

Under the policy, the owner was covered for only ₹1 lakh. Following this, the Madras High Court termed the situation as unfortunate and noted that the owner paying the premium for third party is not adequately covered. It then directed the insurer to provide higher personal accident cover for the owner.

*Source:The Times of India

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