April 22, 2024

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Motor Insurance: How Does IRDAI Define It?

IRDAI proposes 3 years insurance cover for cars, 5 years for two-wheelers:  How it benefits you - Times of India

For both two-wheelers and four-wheelers, the primary purpose of car insurance is to protect the owner of the vehicle from:

1. The destruction or loss of one’s own vehicle and 

2. The car owner’s legal responsibility for any harm or loss brought on to a third party. 

Additionally, the Indian government has mandated third-party liability insurance for all automobiles registered in India. The owner of the vehicle is required by law to make up for any losses suffered by a third party as a result of an accident the vehicle caused. Therefore, third-party insurance is a minimum requirement for all car owners. The Motor Vehicles Act of 1988 declares it illegal to drive in India without insurance. 

Types of insurance 

According to the IRDAI, there are two types of motor insurance #: 

1. Liability Only Insurance Policy – The bare minimum insurance needed, this third-party insurance policy protects you from third-party liability resulting from an accident. *

2. Comprehensive Insurance Policy – This kind of insurance covers your own car completely, as well as your legal obligations to other people. *

Your personal vehicle is not covered by liability-only insurance. Therefore, comprehensive insurance packages are the best choice for consumers who want substantial coverage for their cars.

Damage coverage

The limitations of an insurance policy’s coverage are also defined by the Indian IRDAI. #

The OD (Own Damage) part of insurance contracts typically covers damage to the vehicle. *

The following justifications explain why motor insurance may be able to compensate for loss or damage to the vehicle: 

  1. Fire 
  2. Burglary
  3. Explosion 
  4. Theft 
  5. Self-ignition 
  6. Riot 
  7. Lightening 
  8. Strike 
  9. Unintentional external means 
  10. A tremor 
  11. Frost 
  12. Hurricane 
  13. Flood 
  14. Cyclone
  15. Tempest
  16. Storm 
  17. Thunderstorm 
  18. Terrorist act 
  19. Earthquakes 
  20. Acts of malice 
  21. While in motion on a railroad, an inland river, a road, an aeroplane, an elevator, or a lift 

The premium rates and the money guaranteed under an insurance policy are also specified by the IRDAI. #

The following criteria are used to determine the sum to be insured: 

1. For OD – The current market value of the vehicle determines the car insurance prices of a motor insurance policy. The Insured Declared Value, or IDV, refers to the car’s value. The manufacturer of the vehicle predetermines the insured declared value, which cannot be changed by the owner of the vehicle or the insurance company. Additionally, the age of the car affects the depreciated value, also known as the deflated value. *

2. For Liability Cover – This coverage is provided at the rates set by IRDA, which are determined by the vehicle’s capacity. * #

A car insurance premium calculator is a useful tool for calculating the approximate premium. 

Guidelines for motor insurance 

The Insurance Regulatory and Development Authority offers comprehensive recommendations for both two-wheelers and four-wheelers regarding vehicle insurance. The IRDA offers certain dos and don’ts regarding vehicle insurance coverage in order to safeguard the interests of insurance policyholders and understand the car insurance benefits. #

General instructions 

1. Before purchasing, auto insurance for your vehicle, confirm that the insurance provider is IRDAI-registered. The first thing you should look up on the insurance provider is this information. #

2. Keep in mind that finding an insurance agent is not necessary when buying car insurance. Additionally, you can get it straight from the insurance provider. To make a purchase directly from the business, simply go to the branch office that is closest to you or the website. 

3. Always read the policy carefully to understand the terms, inclusions and exclusions, the renewal and claim settlement processes, the premium amount, etc., before signing any paper, regardless of where you purchase your new car insurance.

* Standard T&C Apply

# Visit the official website of IRDAI for further details.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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