[ghodlur]

In the wake of a judgement by Madras HC (see post#1), IRDA has issued the directive to all Insurance co issuing motor insurance to provide a personal accident cover of Rs 15L for the owner driver from the earlier 2L maximum limit. All motor insurance policies will have a compulsory PA cover of 15L but this will come at an expense of Rs 750 which will be now a part of the third party liability component. The ruling will come into effect from 28th October 2018.

“The cover is provided to the owner-driver whilst driving the vehicle — including mounting into/dismounting from or travelling in the insured vehicle as a co-driver" IRDA said in its circular

https://www.moneycontrol.com/news/bu...h-2972881.html

https://timesofindia.indiatimes.com/...w/65907084.cms

https://indianexpress.com/article/bu...er-to-15-lakh/

[longhorn]

I guess I'm the first victim of this new policy on team-bhp. Just renewed the comprehensive insurance on my 10+ year old Pulsar 150. The premium came to Rs 1953. I know where this is heading. Since they have made it compulsory even for 3rd party insurance, we will see much lesser policy renewals in the future, especially for two wheelers.

People seriously need to engage their brains a lot more before coming out with such rules. Imagine paying nearly 2k on insurance every year, for a vehicle having a resale value of 12-15k. If at all they insist on 15 lakhs coverage, they need to come up with a more reasonable figure. 750 bucks is way too high.

[ksameer1234]

Originally Posted by longhorn

I guess I'm the first victim of this new policy on team-bhp. Just renewed the comprehensive insurance on my 10+ year old Pulsar 150. The premium came to Rs 1953.

I will soon be joining you. my RC390 is up for insurance renewal in a month and I just checked quotes online only to find that zero dep insurance has risen from 2400 to 4500!

Since they have made it compulsory even for 3rd party insurance, we will see much lesser policy renewals in the future, especially for two wheelers.

Absolutely. the PA cover charges earlier were Rs. 50 which has now become Rs. 750. For approx 7 times increase in cover, insurance charges are up 15 times! To be honest, I have no idea how premium is calculated but this makes no sense to a layman. There has to be rationalisation of costs else people would be least interested in taking insurance, especially when it comes to third-party cover.

[Aditya]

Accident cover for vehicle owners raised to Rs. 15 lakh - Posts moved to new thread.

[saket77]

I checked some insurance quotes on Policy Bazar & individually with HDFC Ergo. HDFC is charging Rs. 750 as personal accident cover, even though the date mentioned for the new rule applicability is 28/10/2018.My policy renews with a much earlier date.

While it seems going by the quotes on Policy bazar, that some insurers are offering policies without Rs. 750 as the mandatory accident cover.

Any pointers?

[black12rr]

Few questions I have.

1.Suppose if person already has accident cover like 50 lakhs , the 15 lakhs mandatory does not make sense.

2. If I have 2 bikes or more. I have to pay on each of the bikes 15 lakhs cover , even though I am the only rider.

3. Some one can buy better cover outside , why take from vehicle insurance.

Only ppl who are benefitted from these are insurance companies . I wouldn't be surprised if they had any part in bringing this change.

[james]

This is quite a burden on people who own multiple old bikes that are retained for sentimental reasons and are taken out only once in a blue moon.

Not only have they added the 750, they have raised the base rate as well. All my vehicle policies are up for renewal and for a bike that i was paying 8xx, i will now have to pay 2050. For another bike that i was paying 14xx for, I will now have to pay 3626...and the list goes on.. I only see the insurance companies benefiting from this.

OT: Another thing i find ridiculous is the CC slab. They should have a slab for 1501cc to 2000cc. I have to pay 10,250/- for my decade old baleno since its 90cc more than the 1500cc slab. If it were 90cc less, i would have to pay just 4,322/-....almost 6K less!!! :(

[shrikantbhogale]

Just a gimmick to jack up the collected total premium for swindler Insurance companies using the excuse of Madras HC observation. They cannot make it mandatory. Are they also going to make insurance mandatory for pedestrians/cyclists as well? They too die in road accidents. As it is against the Third Party Premium these fraudsters charge, they only cover TP liability for Rs. 750000/- max.This is sheer loot. It infringes on a person's basic right of choice whether to insure his own life. Also are they going to pay 15 Lacs over and above whatever Term Insurance some individual already has? No. They wont. So it is just another excuse to loot general public. I am sure this decision will be challenged in SC by Consumer Organizations.

Originally Posted by james

OT: Another thing i find ridiculous is the CC slab. They should have a slab for 1501cc to 2000cc. I have to pay 10,250/- for my decade old baleno since its 90cc more than the 1500cc slab. If it were 90cc less, i would have to pay just 4,322/-....almost 6K less!!! :(

Hi James,
Please read my post on this topic. I own a Lancer Diesel and am similarly getting swindled though the BHP of diesel version is much less than the petrol one.

[ghodlur]

Although in the earlier cirular dtd 20th Sept 2018, IRDA had made it mandatory for the Insurance co to charge the Personal Accident cover of 15L for a premium of Rs 750 for the new 4 wheelers and 2 wheelers, this new circular from IRDA contradicts the same. It says the customer will have an option to choose the 15L PA cover and that Insurance cos will make the same available

ALL GENERAL INSURERS (EXCEPT ECGC, AIC AND S'I AND.ALONE HEALTH INSURERS)

Re: Compulsory Personal Accident lnsurance for Owner-Driver under Motor
lnsurance

This has reference to Circular Ref .IRDAUNL/CIR/MOTP/I58/09/2018 dated 20rh September 2018 on the subject. We have received complaints/communications from various stakeholders regarding certain aspects of implementation of Compulsory Personal Accident insurance for owner-driver. ln this regard, insurers shall ensure the following.

1. lt has come to our notice that insurers are offering only long-term Compulsory Personal Accident (CPA) policy for new cars and new two-wheelers along with long term TP policy. lt is clarified that it is the choice of the owner-driver to opt for a one year CPA cover or long term CPA cover and insurers should not compel owner drivers to go in for long term package policy or long term CPA cover. Hence. all insurers are hereby directed to ensure that they necessarily offer the choice of one year CPA cover to an owner-driver
2. GR 36 (A) of the erstwhile India Motor Tariff (IMT) provides for compulsory cover to registered owner only where he/she holds a valid driving licence. Hence compulsory PA cover is not applicable where a vehicle is owned by a company, a partnership firm or a similar body corporate or where the owner-driver does not hold a valid driving licence.

Please acknowledge and confirm that you are complying with the above

IRDA circular attached for reference. Previous IRDA circular 20th Sept 2018 also attached for reference.

Insurance co can however offer PA cover of more than 15L through a separate add on cover and charge premium for the same according to the prevailing rates.

[Gansan]

In my view it is not correct to bring in the value of the vehicle in to the issue. Rs 2 lacs is too small a cover whether for the owner or a third party. Even an old vehicle worth just a few thousands can still hit and kill someone on the road.

[katchkamalesh]

I feel that this is a good move by the court.

1. According to new rule if in case the owner or driver of the vehicle meets with an accident and it leads to death or permanent complete disability then they will be eligible to get a maximum amount of Rs. 15 lakh as compensation even if they cause the accident. (Before the ruling this amount was only Rs 2 Lakh.)

2. This amount is not to be confused with the third party liability. The owner or driver in the above scenario will be eligible to get a higher compensation if they fight their case in motor tribunal and are able to prove that the other party casued the accident.

Originally Posted by black12rr

Few questions I have.

Now to answer your query

1. Accident cover is like term insurance and this personal accident cover is bundled with motor insurance. While the latter is mandatory, you free to choose your accident cover.

2. Yes. Since you will be using both your bikes.

3. While this is true, the sheer number of people who insure themselves is quite low. Now by implementing this government can ensure that everyone who gets a motor insurance policy is now covered for personal accident.

Originally Posted by shrikantbhogale

Also are they going to pay 15 Lacs over and above whatever Term Insurance some individual already has? No.

One will be eligible to claim both the benefits of term insurance cover and personal accident cover. For eg. If one has an active term cover for Rs. 50 Lakh and an personal accident cover, in case of death, the kin of deceased will get Rs 65 Lakh.

Question to all those who feel that this rule amounts to looting.

There is something called a passenger cover for all cars. This cover provides compensation in case of death or disability to the passengers who travel with us in our car. This is an optional cover. How many of us have actually opted for this cover?

[saket77]

Originally Posted by katchkamalesh

One will be eligible to claim both the benefits of term insurance cover and personal accident cover. For eg. If one has an active term cover for Rs. 50 Lakh and an personal accident cover, in case of death, the kin of deceased will get Rs 65 Lakh.

Are you absolutely sure of the above?

Term insurance limit is set with respect to one's income, aiming to compensate the financial loss to the dependents due to the loss of the insured person. Many go for max coverage for the term plan available to them. When you apply for a term plan, it is mandatory to declare any other life insurance that you already have. That sum assured is subtracted from the term plan coverage to arrive at the max coverage one can get so that the insurable value does not go beyond the 'fair value'; if I can call it.

In view of above, I hope someone more knowledgeable from the field share their insight.

Originally Posted by katchkamalesh

I feel that this is a good move by the court.

Insurance is still a matter of solicitation.

Good move in a way yes, but the amount of Rs. 750/- looks absurd. I almost paid something in the north of Rs. 2k for my motorcycle which I Insured for 900 bucks last year. Heck, this year's premium for 1/4th of the IDV since new is more than what I paid when I rode the bike out of the showroom.

Originally Posted by katchkamalesh

3. While this is true, the sheer number of people who insure themselves is quite low. Now by implementing this government can ensure that everyone who gets a motor insurance policy is now covered for personal accident.

Question to all those who feel that this rule amounts to looting.

Dear Kamalesh, have you gone through the process of filing/ claiming a TP insurance? There are lakhs of pending cases of TP insurance. I have fought one for almost 10 years and finally gave up because the cost of fighting it surpassed the benefits years ago. I stopped appearing in the court because I have a job to do, mental peace was robbed, lawyer's fee was always paid at every hearing and sometimes in between too, and like most others, I had a limit to my patience. Imagine as a man who is fairly abreast of the related laws, rules of modern world and fairly young and energetic with reasonable financial means can give up, imagine the chance a poor housewife or old parents stand having the will & the means to take the fight to the wire and wining it.

Regards,
Saket

[katchkamalesh]

Originally Posted by saket77

Are you absolutely sure of the above?

Hi Saket,

I’m 100% sure that one can have multiple term insurance policies and it is also advisable to have multiple policies of a smaller sum rather one with a large sum.

https://www.businesstoday.in/moneyto...ry/193560.html

Only in health insurance you cannot make a claim for a bill with two different insurers and that too only if the bill amount falls within the coverage amount.

For eg. Assume that a person has 2 medical policies with coverage of 5 lakh each. One with Apollo munich and other with Star.

• If that person hospitalized for some reason and bill comes to 4 lakh then he can claim with only one of the insurer.
• Now assume that the bill runs to 7 lakhs. In this case, he will be able to claim the entire 7 lakh by splitting it among both the insurers.

I agree that the increase in premium from Rs 50 to Rs 750 is a bit on the higher side. When the penetration of insurance increases then probably premium will decrease.

Even I have been at the receiving end of claiming TP and I know that it can be a pain.

The lawmakers should come with a plan to tackle this but unfortunately I do not expect this to happen anytime soon. I am saying this because to fight an accident case, the lawyers were demanding a percentage of claim amount as fee and this is shared among various departments.

[shrikantbhogale]

Originally Posted by saket77

Insurance is still a matter of solicitation.

Good move in a way yes.


Dear Kamalesh, have you gone through the process of filing/ claiming a TP insurance? There are lakhs of pending cases of TP insurance. I have fought one for almost 10 years and finally gave up because the cost of fighting it surpassed the benefits years ago. I stopped appearing in the court because I have a job to do, mental peace was robbed, lawyer's fee was always paid at every hearing and sometimes in between too, and like most others, I had a limit to my patience.
Regards,
Saket

Perfectly said - Insurance is a matter of solicitation. Google the meaning of solicitation. The meaning is perfect.

It is good that better sense has prevailed for the IRDAI and they have made it optional. Or else it would have led to additional burden of litigation in SC to fight against making it mandatory. Making it mandatory was a bad move. I stick to my view. It is my prerogative and my fundamental right whether I want to insure myself or not (Read whether I want to get swindled for the premium amount by fraudster Insurance Co. or not)

Also you have very correctly pointed out that it is an useless exercise fighting for Insurance amount as the costs in many cases surpass the benefits.

Originally Posted by katchkamalesh

3. While this is true, the sheer number of people who insure themselves is quite low. Now by implementing this government can ensure that everyone who gets a motor insurance policy is now covered for personal accident.


One will be eligible to claim both the benefits of term insurance cover and personal accident cover. For eg. If one has an active term cover for Rs. 50 Lakh and an personal accident cover, in case of death, the kin of deceased will get Rs 65 Lakh.


Question to all those who feel that this rule amounts to looting.


There is something called a passenger cover for all cars. This cover provides compensation in case of death or disability to the passengers who travel with us in our car. This is an optional cover. How many of us have actually opted for this cover?

It is none of govt.'s business to make personal accident cover compulsory. It is the individual's choice whether he wants person's having insurable interest in his life to get some compensation or not. Unless govt. is hand in glove with insurance co.'s in looting public by the way of premiums. Govt should rather concentrate on fulfilling its duty of ensuring pothole free good roads lack of which is major cause of accidents too.

The amount the Insurance co. will pay will be related to the income of the injured/deceased so if he has a Term insurance already up to max limit, making him compulsorily buy personal accident cover bundled in TP policy amounts to looting. Basically making personal accident cover compulsory itself amounts to looting and infringement of fundamental right.

As for additional passenger cover, I never do and am not interested in increasing the amount swindled from me and the profit of insurance co. by paying for it. Especially when it is common knowledge that getting the amount is such a pain in case one does meet with an accident. The basic attitude of insurance co.'s in case of any claim is to try to brush it off or to try settle for as little as they can. If not make the claimant go for expensive and lengthy litigation to get his money.

Rather if there was a option, I would happily keep an permanent FD as security for TP claims rather than pay premium to swindler insurance co.'s

[saket77]

Originally Posted by katchkamalesh

Hi Saket,

I’m 100% sure that one can have multiple term insurance policies and it is also advisable to have multiple policies of a smaller sum rather one with a large sum.

Your advise is perfectly OK given that the insured is within the calculated sum assured based on his yearly income. My point is what if I'm fully insured to the point my yearly income allows?

Originally Posted by katchkamalesh

I agree that the increase in premium from Rs 50 to Rs 750 is a bit on the higher side. When the penetration of insurance increases then probably premium will decrease.

I don't remember if insurance premium was ever decreased
On the other hand, if insurers start charging such absurd amounts for even a two wheeler insurance, I'm afraid that many may skip buying insurance altogether which is even more dangerous; both for the rider and for the society.

Regards,
Saket.