New Delhi, Nov 9 (UDN): The Insurance Regulatory and Development Authority of India (IRDAI) has introduced major changes to the vehicle insurance framework. From December 15, car and two-wheeler insurance policies will be divided into four categories, allowing customers to choose insurance coverage according to their individual requirements and financial needs. The new system will also help policyholders understand the premium payable for each type of coverage.
IRDAI has directed all general insurance companies to implement the revised system. Under the new guidelines, vehicle insurance will be divided into four categories.
The first category is Third-Party Insurance, which will remain mandatory for all vehicles. It provides coverage against legal liabilities arising from injury, death or property damage caused to a third party in an accident.
The second category will cover Passengers and Occupants of Vehicles. This optional insurance will provide financial protection to passengers travelling in cars and individuals riding pillion on two-wheelers. Employees travelling in vehicles can also be included under this coverage. However, insurance protection will not be available to passengers exceeding the vehicle’s registered seating capacity.
The third category will be Personal Accident Insurance. Under this provision, personal accident coverage for the vehicle owner will remain mandatory, while additional accident insurance for other passengers, pillion riders and drivers other than the owner will be optional.
The fourth category will cover Damage to the Insured Vehicle. This insurance will provide financial protection against losses or damage to one’s own vehicle due to road accidents, theft or other unforeseen incidents. This coverage will also remain optional.
Under the revised arrangement, insurance companies will be required to obtain a prescribed option form from customers, clearly mentioning the insurance facilities they wish to purchase. The requirement will apply regardless of whether customers buy policies online or directly through insurance company offices.
Additionally, insurers will be required to provide customers with a Customer Information Sheet (CIS), explaining the details of the policy and the coverage selected.
IRDAI has also directed insurance companies to integrate the new insurance framework with the digital insurance platform ‘Bima Sugam’, with the objective of making vehicle insurance more transparent, accessible and customer-friendly.
The revised system is expected to give vehicle owners greater flexibility in selecting insurance coverage while ensuring clarity regarding policy benefits, optional protection and premium payments.
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