The Insurance Regulatory and Development Authority of India (IRDAI) has released a circular stating that insurers cannot force individuals to buy multi-year personal accidental (PA) insurance.
This means that vehicle owners can now choose the tenure of their PA cover under the
motor insurance policy. They can even buy one-year PA plan, if they wish to.
Earlier this year in September, IRDAI had directed insurers to provide
personal accident cover of ₹15 lakh for the owner drivers of the vehicle under the motor insurance policy following the Madras High Court order. Previously, the mandatory cover was ₹2 lakh for cars and ₹1 lakh for two-wheeler owners.
This mandatory cover has added to the overall cost of third-party insurance and hence, contributed to the increase in price for buying new vehicles or renewal of existing policies. A premium of ₹750 per annum is to be applicable for ₹15 lakh PA cover, a significant jump from earlier premiums which was ₹100 for cars and ₹50 for two-wheelers.
Due to the increase in the sum assured for personal accidental cover, all vehicle owners and drivers are now eligible for enhanced insurance benefits against death or complete permanent disability. General insurers are required to provide it, both for third-party liability cover as well as comprehensive motor insurance plans.
*Source: Money Control
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