Irda Launches Long-Term Insurance for 2-wheelers

In a major relief to two-wheeler owners, the Insurance Regulatory and Development Authority (Irda) has introduced long-term motor third-party insurance policy with a three-year term. This means, two-wheeler owners don’t need to renew their motor insurance every year.

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Third-party insurance covers the liability a third party by a vehicle owner during an accident. Third-party motor insurance is mandatory in India.

Irda said the total premium charged for the third-party coverage would be thrice the annual premium for two-wheelers as decided by the regulator. Motor third-party premium is regulated by Irda and the regulator brings out revised rates for these policies every year, based on the claims experience.

The regulator also said the premium would not be revised upwards or downwards during the period of the policy. Insurance industry executives said two-wheeler owners would opt for these covers as there would not be any premium fluctuations for the three-year term, unlike the one-year policies where the premium would be revised every year.

General insurance companies have already planned to launch products. Sanjay Datta, head of underwriting and claims at ICICI Lombard, said the company would launch a motor third-party policy for two-wheelers after filing the product with Irda.

From April 1, 2014, third-party premiums in the two-wheeler category were raised by 9-10 per cent, compared with the proposed 1-45 per cent, across categories.

Irda has also said the entire premium would have to be paid in one instalment and insurers would not be able to cancel the standalone third-party cover in any circumstances except in case of “total loss”. In case of cancellation of policy under total loss, premiums for the full unexpired years would be refunded. Non-life companies wanting to introduce these policies will have to submit a letter of intent to Irda.

The regulator said since there is also a need to have long-term comprehensive cover including own damage and third-party covers, insurers can also file a three-year term comprehensive policy for two-wheelers.

Sources said longer-tenure policies for private cars are also on the anvil and could be launched in the next few months.

(Original Source - http://www.business-standard.com/article/finance/irda-launches-comprehensive-two-wheeler-insurance-with-3-year-policy-term-114081201036_1.html)

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^The renewal of insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for a transaction may vary subject to additional data requirements and operational processes.

^The buying of Insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for transaction may vary subject to additional data requirements and operational processes.

#Savings are based on the comparison between highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*TP price for less than 75 CC two-wheelers. All savings are provided by insurers as per IRDAI-approved insurance plan. Standard T&C apply.

*Rs 538/- per annum is the price for third party motor insurance for two wheelers of not more than 75cc (non-commercial and non-electric)

#Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*₹ 1.5 is the Comprehensive premium for a 2015 TVS XL Super 70cc, MH02(Mumbai) RTO with an IDV of ₹5,895 and NCB at 50%.

*Rs 457/- per annum (1.3/day) is the price for the third-party motor insurance for private electric two-wheelers of not more than 3KW (non-commercial). Premium is payable on an annual basis