Insurance regulator IRDAI has directed that all motor policies are to include personal accident protection that will cover the owner-driver for INR1.5m ($20,400) in case of death due to accident while driving. The move is seen as benefiting in particular two-wheeler owners who are often under-insured.
IRDAI’s directive comes in the wake of a judgment of the Madras High Court in October 2017. The court had ordered the IRDAI to hike the personal accident cover from the existing INR100,000 to not less than INR1.5m “to add to some succour or solace to victims of road accidents, who are owners of vehicles, who may sustain bodily injury or death”, reports Times of India.
“The cover is provided to the owner-driver whilst driving the vehicle — including mounting into/dismounting from or travelling in the insured vehicle as a co-driver,” IRDAI said in its circular.
The additional annual premium will be INR750 for the cover, which will be part of the mandatory insurance cover that all vehicle owners need to buy.
While the insurance has to be provided mandatorily with both comprehensive and third party covers, the regulator has left it to insurers to decide on how to price long- term policies. An earlier order makes it mandatory for insurers to offer long-term third-party liability cover of five years for two wheelers and three years for four wheelers.
Mr Sanjay Datta, head of underwriting and claims at ICICI Lombard General Insurance, said, “Insurers will have the freedom to offer a cover that is higher than INR1.5m. Overall, there has to be equity in terms of the compensation that is available to the owner-driver and to third-party victims.”