Business Wire India
The Insurance Regulatory and Development Authority of India (IRDAI), in a circular on 28th
August, asked general insurance companies to start offering mandatory multi-year Third-Party insurance policies for all new private cars and two-wheelers from 1st
September onwards. The move follows the 20th
July judgment of the Supreme Court, which observed that about 66% of vehicles were running on road without any Third-Party insurance cover and the victims of accidents were not getting compensation because the vehicles were not insured.
While the Supreme Court has mandated a 3-year Third-Party Cover for all new cars and 5-year Third-Party Cover for all new two-wheelers sold from 1st
September onwards, the customers have been given an option by IRDAI to go for either a standalone Third-Party (TP) cover for 3/5 years or bundled TP cover for 3/5 years along with 1-year Own Damage (OD) policy. Customers also have the option of buying a 3/5 years long-term comprehensive insurance if they so desire.
COCO by DHFL General Insurance, a leading InsureTech company in India, has taken up the initiative of creating awareness about this new mandate under their “Care More” campaign.
As a part of the campaign, COCO will be reaching out to new vehicle buyers via articles, infographics, videos and social media posts asking them to be aware while buying insurance for their new vehicles and urging them to understand their options before making an insurance purchase for their new vehicles.
“This is a welcome move as around 70% of Two wheelers and around 35% of Four wheelers on Indian roads do not have the Mandatory Third-Party insurance. Along with that, a lot of policyholders forget to renew or find it difficult to renew their insurance. This mandate will address that problem. However, customers need to understand that the long-term insurance mandate applies to only Third-Party insurance and does not mandate customers to buy a Long-Term comprehensive insurance,” said Mr. Vijay Sinha, MD and CEO – DHFL General Insurance.
While the customers must mandatorily take a 3-year and 5-year Third-Party policy for their new car or bike respectively, they can choose to take either a 1-year Own Damage (OD) cover or a 3/5 year comprehensive cover depending on whether they are buying a Four Wheeler or a Two Wheeler. This implies that while the option for buying a 3/5 year comprehensive insurance is also available, the customer should make an informed choice for buying insurance for their new vehicle, as the cost will have an impact on the On-Road price of their new Four Wheeler or Two Wheeler.