The insurance regulator has been busy at work in 2019 laying the groundwork to make motor insurance a simpler product. The Insurance Regulatory and Development Authority of India (IRDAI) has proposed various measures throughout the year, which if becomes law, will benefit policyholders. Here is a look at 10 such IRDAI recommendations:
1. The sum insured calculation for private cars made simpler: As per a proposal, "For brand new private car up to 3 years, the sum insured shall represent the current day manufacturer's listed price of the vehicle insured including value of all accessories fitted thereon by the manufacturer and adjusted by age-wise depreciation to arrive at the sum insured as per new depreciation table suggested."
Further, the regulator recommended, "A new sum insured option for brand new private cars where 'Return to Invoice' add-on is a part of basic cover."
2. Clarity on renewing standalone own damage policy: The regulator has recommended that for standalone OD cover, expiry of the cover should not be later than the expiry of the liability policy. Also, all the details of the liability policy (including name, policy number and period) should be captured in the OD policy schedule.
3. Your driving habits will determine policy premium: The regulator has asked the Insurance Information Bureau of India (IIBI) to form and manage a central repository of telematics data, where data from various sources can flow to create a common pool.
4. Standardised grid for non-claim bonus (NCB): IRDAI has recommended a standardised NCB grid for long-term motor insurance policies.
5. Surrender registration certificate to get theft claim: The regulator has recommended that in all cases of Total Loss /Constructive Total Loss Claims and theft claims, the Registration Certificate (RC) of the vehicle shall be cancelled and the claim shall be settled only after the insured surrenders such cancelled RC. The policy shall be cancelled without return of premium.
6. Compulsory Deductibles will now be Standard Deductibles: IRDAI has not only recommended to change the name of 'Compulsory Deductibles' to 'Standard Deductibles' but also has recommended that there shall be no waiver of the standard deductibles and has suggested a revised deductible ruling.
7. Vehicle age-based depreciation rule for claim settlement: The regulator said, "Vehicle age-based depreciation has been recommended for partial losses to make it completely objective and remove all ambiguity and subjectivity in claim settlement."
8. Insurance for passengers: The IRDAI has recommended that all the occupants travelling in motor vehicles shall have Rs 25,000 medical expenses coverage arising out of an accident to the insured vehicle covered under the basic policy and proper premium for this shall be charged by the insurers.
9. 'Named Driver' insurance policy: The recommendation of 'Named Driver policy' as an option for private car and two-wheeler policies is a good move taken by the regulator. The details of the driver may be incorporated in the policy schedule.
10. Separate third-party premium category for electric vehicles: This year, a separate third-party insurance category for electric vehicles (EVs) was issued. Further, to increase the sale of EVs, the third-party motor insurance premium for electric vehicles are issued at a discount of 15 percent.
Source & full article at:
ET Auto
18th December 2019, 11:19
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