One of the favorite stress busters for motor enthusiasts is going on a long drive, with a favourite playlist on the car stereo to set the mood. Even with the plethora of options available these days for travel, driving in a car or two-wheeler is the most preferred option among Indians. Be it driving for work or a small errand nearby or a weekend getaway, we prefer to drive ourselves to our destined location. The sense of comfort and convenience that comes along with driving our own vehicle trumps any mode of transport.
With that being said, this ease and preference of ours have also presented the government with a setback or rather a challenge - road safety. Although the government is setting ground rules and ensuring road safety, it is our prime responsibility as the citizens to strictly adhere to the rules and regulations to ensure a smooth ride for all the riders. The government of India has made it mandatory for all vehicle owners to have an insurance policy in place to help protect the riders and provide them with a financial backup, in case of an unfortunate event.
With the Insurance Regulatory and Development Authority of India (IRDAI) in place, the insurance providers are directed to provide a mandatory and safe ride to all the vehicle owners. All the vehicle owners are already in possession of third-party liability insurance and personal accident cover, as mandated. But, in June 2020, IRDAI has issued a new set of rules and regulations for all the vehicle owners and insurance providers to follow to ensure further road safety. This new rule came into effect on the 1st of August, 2020.
According to the IRDAI’s new set of rules, all the insurance providers are expected to stop the sales of long-term motor insurance policy plans to new vehicle owners. So, if you are planning to buy a car or two-wheeler in the near future, you will not be insured with the mandatory third-party liability insurance which will be for a period of three years for cars and five years for motorbike owners, but a shorter term.
Further to this, IRDAI has also demanded to scrap the long-term comprehensive motor insurance package policy to new vehicle owners. Though the scrapping of these policies might hurt the insurance providers a little, the new set of rules and regulations will have the new vehicle owners across India at a major advantage. With no long-term policies in place, the new vehicle owners can save a lot of money for they will not have to pay a huge lump for premiums upfront, which c
. In addition to this, the new vehicle owners also have the liberty to change their insurance policy or the insurance provider after a mandatory period of one year, if they are unhappy with the policy plans or the customer service.
With this being mandated, it can be a major benefit to vehicle owners for they cannot be persuaded into purchasing long-term own damage insurance, which will provide protection against any damage to the policyholder or the vehicle. The own-damage premium rates are relatively higher when compared to the standard policy premiums.
The new vehicle owners can rejoice because they can easily claim their no-claim bonus (NCB) to avail of discounts on future policies at the time of their renewal, every year. Further to this, if they would still like to avail of the benefits of the comprehensive policy packages, they could either get a package policy with both the third-party liability and own damage policy for one year. Or they could also opt for a long-term third-party policy and a stand-alone own damage for a tenure of their choice.
It’s time for the new vehicle owners to revel in happiness for not only are they getting a new vehicle, but also an ideal insurance policy on their terms, thanks to IRDAI’s new rules.