Following a Supreme Court order, the Insurance Regulatory and Development Authority of India (Irdai) has asked all general insurers to offer long-term mandatory third-party insurance cover with effect from September 1.
Accordingly, the third-party insurance cover for new cars will be for three years, while the cover for new two-wheelers will be for five years. Officials in the insurance industry said that after this order, they will start selling a five-year comprehensive cover for two-wheelers and three-year comprehensive cover for four-wheelers. A comprehensive cover includes third-party and own damage cover. While Irdai decides the premium rates for third-party cover, premiums for own damage cover is decided by the insurers.
The Supreme Court on July 20 stated that, “We make it clear that the third-party insurance cover for new cars should mandatorily be for a period of three years and for two-wheelers, it should mandatorily be for a period of five years. This may be taken and treated as a separate product. The decision should be implemented from lst September, 2018 on the policies sold.” —FE