Posted on Sep, 2019 by PINC Insurance
There has been a sudden spike in the demand for insurance policies following an amendment in the Motor Vehicles Act (2019). The amendment that has come into force with effect from September 1st, 2019 has twirled most of the two-wheeler owners towards the insurance companies. Those who were commuting on a two-wheeler without an insurance policy are willing to pay the premium and get their vehicle insured.
The new Act empowers the safety framework on the Indian roads. It ensures stricter penalties on the violations of the rules like driving license and insurance policies. As per estimation, more than 60% of the two-wheelers on Indian roads are uninsured. This is primarily due to the lack of awareness amongst the masses. The small segment of two-wheeler owners who had insured their vehicles was mostly in the wake of unforeseen circumstances i.e. the third-party damage cover. Also, in order to avoid being caught by traffic personnel, third-party insurance is mandatory. The government has doubled the fine from Rs 1000 to Rs 2000 in absence of third-party liability insurance.
It is mandatory for vehicles registered after September 1st, 2018 to have third party coverage for five years and the premium must be paid upfront for five years. However, there is no such restriction on own damage (OD) coverage where the premium can be paid on yearly basis. In case of a comprehensive policy, the third-party and own damage coverage is for five years. Hence, the renewal will be sought only after five years.
IRDAI has enhanced the personal accident coverage from Rs 1 Lakh to Rs 15 Lakh, subsequently the premium has beefed up from Rs 50 to Rs 750. IRDAI has unbundled the personal accident cover (PAC) and stand-alone policy with effect from January 2019. As a result, the insurers can’t force owners to take along-term PAC and hence one may buy a one-year PAC. In case someone has a PAC of Rs 15 Lakhs they may not buy the same.
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