Irda allows 3-year third party insurance cover for two-wheelers

Irda allowed general insurance companies to provide third party motor cover for two-wheeler for a period of three years instead of current practice of annual renewal, a move which could be replicated for four-wheeler and commercial vehicles.

However, the policy has to be renewed every year in case of own-damage cover. Own-damage cover risk pertaining to damage of vehicle due to accident. The three-year standalone third party insurance cover would provide convenience to the user and help insurance firm in collection of premium in one go.

Insurance Regulatory and Development Authority (Irda) said the new policy has been introduced following representation from various general insurance companies for long term motor products.

“The Authority has perused the matter and decided to introduce Stand Alone Motor Third Party Insurance Policy for two wheelers for a period of three years subject to... conditions,” it said in a release. The other conditions include no revision in premium during the period of policy, no cancellation of standalone TP (third party) cover, except in case of total loss where premium for the full unexpired years have to be refunded. No change in other terms and conditions as against the one year products, Irda said. 

The general insurance industry has welcomed the introduction of long-term third party motor insurance policy for two-wheelers by sectoral regulator Irda. The regulator allowed general insurance companies to provide third party motor cover for two-wheelers for a period of three years instead of the current practice of annual renewal. “There are a good number of vehicles that are plying without having any insurance coverage. So, this progressive move by Irda will help us bring more and more such two-wheelers under insurance cover,” ICICI Lombard MD and CEO Dasgupta said. Getting the two-wheeler insured at the time of purchase is mandatory. The problem arises from second year onwards when owners often fail or forget to renew insurance cover of their vehicles.

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