23 Sep 2018: IRDAI hikes insurance cover for motor owner-driver to Rs. 15L
All car and bike owners will now get a personal accident cover of Rs. 15 lakh for an annual premium of Rs. 750 as the Insurance Regulatory and Development Authority of India (IRDAI) has raised the minimum insurance cover.
Currently, the capital sum insured for two-wheelers and private cars/commercial vehicles is Rs. 1 lakh and Rs. 2 lakh, respectively, under this section.
Details: It will provide relief for the families of accident victims
IRDAI's move will provide relief to the families of accident victims, especially to two-wheeler owners who, often, remain under-insured.
"It's important to have an appropriate personal accident cover, for an effective financial support to the policyholders and their family members if she/he is disabled or succumbs to injury...This will address the issue of under-insurance," Bajaj Allianz CEO, Tapan Singhel said, welcoming the move.
Fact: Insurers to start issuing covers as per IRDAI circular
As per the IRDAI's circular, insurers may start issuing such covers from the date of the circular while filing needs to be done under File and Use Guidelines on or before October 25. All other provisions for Motor Third Party Insurance will continue to apply.
Why?: The reason behind IRDAI's order
The IRDAI's order comes after a judgment by Madras High Court, which asked the CPA cover to be enhanced to at least Rs. 15 lakh, so that the amount "will provide some relief to the victims of road accidents, the owner of the vehicle, who may incidentally sustain bodily injury or death."
The judgment came after the tragic death of P Rajni in 2011.
Fact: The tragic story behind the IRDAI's order
P Rajini, who was riding his own bike and was killed when he swerved to avoid a cyclist, is the reason behind IRDAI's order. His wife R Rekha approached the Motor Accident Claims Tribunal, which awarded a compensation of Rs. 53L under the third-party cover.