Minimum insurance cover for owner driver rose to Rs.15 lakh

The insurance regulator IRDA directed all the general insurers to provide a minimum capital sum of Rs.15 lakh under compulsory personal accident cover for owner-driver under Liability Only to all classes of vehicles at the premium rate of ₹750 per annum for annual policy. Under Section lll of Package Policies/ Bundled Covers on payment of additional premium at the option of the insured, higher CSI may be provided over and above ₹15,00,000 through Optional Covers under Liability Only. The new initiative would offer effective financial support to the policyholders and their family members if she/he is disabled or succumbs to injury due to an accident. As per Regulatory and Development Authority of India (IRDAI) circular, the premium rate will be valid until further notice from the authority. As per media reports, the Insurers are required to start issuing such covers effective from the date of receipt of IRDAI circular and files the compliance by October 25, 2018.

At present, the capital sum insured (CSI) for motorized two-wheelers and private cars/commercial vehicles is ₹1 lakh and ₹2 lakh, respectively. The minimum insurance cover of Rs.15 lakh will address the issue of under-insurance to the some extent. A few general insurers have already been offering add-on covers under package policies with higher CSI over and above the stipulated on payment of additional premium. All other terms and conditions provided under third party insurance will remain unchanged.