Comprehensive two-wheeler insurance policies would
soon get cheaper once policies with three-year validity come into effect. Large
insurance companies General Insurance, apart from government-owned companies,
are planning to launch policies with riders for customers.
To enable long-term motor insurance for
two-wheelers, the Insurance Regulatory and Development Authority (Irda) has
introduced a long-term motor third-party insurance policy for two-wheelers with
a three-year term.
Irda said the total premium charged for the
third-party coverage would be three times the annual third-party premium for
two-wheelers as decided by the regulator. Motor third-party premium is regulated
by Irda and the regulator brings out revised rates for these policies every
year based on the claims experience. Third-party motor insurance is mandatory
in India.
The insurance regulator also said that the premium
would not be revised upwards or downwards during the period of the policy.
According to insurance industry executives, two-wheeler owners would opt for
these, since there would not be any premium fluctuations for the three-year
term unlike one-year policies where the premium would be revised every year.
Sector officials said the firms would save costs by
not having to renew policies every year. This, they said, would be passed on to
customers in the form of discounts on the ‘own damage’ front. Customers would
also get an option to stay with their one-year policy or opt for a three-year
policy.
Third-party motor insurance includes two parts, own
damage that protects the driver/owner from accidents and third-party cover that
covers liability from third-party accidents. Third-party cover is mandatory,
while own damage is optional.
General
Insurance companies have already planned to
launch products. General Insurance companies said his company would file a
product in tandem with the Irda guidelines.
He added add-ons could be offered with the
policies, subject to Irda approvals.
“With respect to the pricing of the product, we are
analysing the past trends for a suitable pricing mechanism.”
From April 1, 2014, third-party premiums in the
two-wheeler category were raised by 9-10 per cent, compared with the proposed
1-45 per cent across segments – sub-75cc, 75-150cc, 150-350cc, and more than
350cc.
had earlier said the insurer would launch a motor
third-party policy for two-wheelers after filing the product with Irda.
Thereafter, the company would file a comprehensive two-wheeler plan, he added.
Irda also said that the entire premium would have
to be paid in one instalment and insurers would not be able to cancel the
standalone third-party cover in any circumstances except for ‘total loss’. In
case of cancellation of policy under total loss, premiums for the full
unexpired years would be refunded. Non-life companies wanting to introduce
these policies will have to submit a letter of intent to Irda.
According to the regulator, since there is also a
need to have long-term comprehensive cover including own damage and third-party
covers, insurers can also file three-year term comprehensive policy for
two-wheelers. While the ‘own-damage’ motor segment covers losses to self during
accidents, motor third-party covers liability to a third-party caused by a
vehicle owner during an accident.
[Source:http://insuranceblog.asia/two-wheeler-insurance-policies-to-get-cheaper-easier-to-buy/]
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