Car/bike insurance premiums to go up again as accident cover made mandatory
The Insurance Regulatory and Development Authority of India (IRDAI) has ordered vehicle insurers to raise the Compulsory Personal Accident (CPA) cover to Rs 15 lakhs for the owners of both two-wheeler and four-wheelers plying on the nation’s roads. This will see insurance rates go up for the second time this month.
The order to increase in the personal mandatory cover comes in response to an October 2017 verdict by the Madras High Court that ordered the IRDAI to raise the personal accident cover to Rs 15 lakhs from the maximum Capital Sum Insured (CSI) of Rs 1 lakh (two-wheelers) to Rs 2 lakhs (four-wheelers) to help provide some succour to road accident victims and their families.
The move to increase the personal accident cover for the owner-driver will see the premium rise to Rs 750 compared to the previous rates of Rs 50 for two-wheelers and Rs 100 for four-wheelers. Personal accident cover for vehicle owners is mandatory as per insurance regulations and covers the owner and their drivers and will be provided with both comprehensive covers and third party liability by insurers.
The IRDAAI has stated that any vehicle owners looking for a cover of over Rs 15 lakh will be able to do the same by paying extra over the new minimum Rs 750 premium. The new CSI of Rs 15 lakhs can be availed by customers getting their vehicles insured from the day the insurance agency receives the circular with the new order from the IRDAI.
This is the second time this month that automobile insurance rates have gone up and it the second time that it has been done following an order from India’s judiciary. From September 1 onwards, as per an IRDAI directive following a ruling by the Supreme Court, saw the mandatory addition of five years of third-party insurance for any car or SUV getting insured, whether old or new. For two-wheelers, the minimum mandatory third party insurance required was set at 3 years. These mandatory changes following the Supreme Court’s directive to increase road safety lead to a minimum 4 percent increase in the on-road prices of cars and bikes across the nation. While the new increase in premium will be between Rs 650 and Rs 700 for four and two-wheelers respectively, it is something the benefits will be appreciated by the general public. Source: