Insurance Regulatory and Development Authority of India (IRDAI), in June, directed insurance companies to stop selling long-term motor insurance package policy to new vehicle owners. Starting today (August 1), the long-term comprehensive motor insurance which covers damage to the vehicle and damages (or losses) caused to a third-party person, for three years for cars and five years for two-wheelers are scrapped.
From August 1st onwards, new car and two-wheeler owners in India will get benefits in motor insurance that could lower the upfront cost of vehicles as compared to before since vehicle insurance providers are no longer allowed to sell long-term own damage (OD) policy cover to new passenger vehicle owners meaning customers will not have to pay a higher upfront premium for the insurance policy and they will also have the freedom to change their insurance provider after one year.
Note that car owners will have to purchase three-year third-party (TP) cover while the same in case of two-wheelers will be five-years. With these changes, vehicle dealerships can no longer coerce customers into buying long-term OD insurance cover (which has a higher premium than standard policy…………Read More