IRDAI unbundled the compulsory personal accident cover from the motor insurance plans
The Insurance Regulatory and Development Authority of India (IRDAI) has allowed vehicle owners to buy a single Personal Accident (PA) cover for multiple vehicles owned by them. Until the end of 2018, a vehicle buyer would have had to purchase a separate PA cover every time he/she bought a new vehicle. Under the new regulations, the insurance companies will provide a standalone PA cover for owner-drivers from January 1st, 2019.
Earlier, in September 2018, the IRDAI had raised the compulsory PA cover for every owner-driver to ₹15 lakh for an annual premium of ₹750 after the Madras High Court order of October 2017. Previously, the capital sum insured as PA cover for two-wheelers and private car owners used to be ₹1 lakh and ₹2 lakh respectively.
In a circular dated 11th December 2018, the IRDAI unbundled the compulsory personal accident cover from third-party insurance plans and permitted the issuance of standalone PA cover policies for the owner-drivers of the vehicle. This move by the insurance regulator is expected to reduce the cost of ownership of new vehicle, as the buyer will save an annual premium of ₹750 on the insurance amount, if one had already bought a separate PA cover.
"Since a general personal accident cover also includes cover against motor accidents, if an owner-driver already has a 24-hour personal accident cover against Death and Permanent Disability (Total and Partial) for capital sum insured (CSI) of at least ₹15 lakh, there is no need for a separate compulsory personal accident (CPA cover) to be taken,"said the notification of IRDAI.
Industry experts welcomed the move, stating that it will reduce the premium outgo of the customers and will encourage them to buy new vehicles more prominently."This would bring down the additional premium outgo that customers used to pay because they were mandated to buy multiple personal accident covers before," said the founder of an online insurance aggregator.
*Source: Live Mint
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