Traditionally, as you would be aware, your car and two-wheelers have to be insured every year.
Given the requests from the industry, Insurance Regulatory and Development Authority (IRDA) has recently accorded its approval for the introduction of vehicle insurance policies for a term of three years.
However, as a baby step, this will presently apply only to
(a) two wheelers, and
(b) third party cover only (own damage cover will continue to be on an annual basis).
These 3-year motor insurance policies would be subject to the following conditions.
- Total premium charged would be 3 times the annual premium as announced by IRDA from time to time (as you may be aware, while companies are free to decide on the premium for own damage cover, third party cover premium is still fixed by IRDA.)
- Companies are not allowed to revise the premium, either up or down, during the policy period
- Entire premium has to be paid in one installment
- Except in case of total loss, insurers cannot cancel this standalone third party cover
- In case of cancellation, premiums for full unexpired years would be refunded
- Terms and conditions on these longer term policies would be the same as those applicable to 1-year products
Given the annual increases in the third party premiums, this would help people save money on their insurance premiums.
Based on the experience, even comprehensive covers — that cover both third party and own damage — may be permitted soon. And hopefully, this benefit would to be extended to the four wheelers too at the earliest.
Meanwhile, here are the 'Ten key aspects of vehicle insurance that you must know'.
Given the requests from the industry, Insurance Regulatory and Development Authority (IRDA) has recently accorded its approval for the introduction of vehicle insurance policies for a term of three years.
However, as a baby step, this will presently apply only to
(a) two wheelers, and
(b) third party cover only (own damage cover will continue to be on an annual basis).
These 3-year motor insurance policies would be subject to the following conditions.
- Total premium charged would be 3 times the annual premium as announced by IRDA from time to time (as you may be aware, while companies are free to decide on the premium for own damage cover, third party cover premium is still fixed by IRDA.)
- Companies are not allowed to revise the premium, either up or down, during the policy period
- Entire premium has to be paid in one installment
- Except in case of total loss, insurers cannot cancel this standalone third party cover
- In case of cancellation, premiums for full unexpired years would be refunded
- Terms and conditions on these longer term policies would be the same as those applicable to 1-year products
Given the annual increases in the third party premiums, this would help people save money on their insurance premiums.
Based on the experience, even comprehensive covers — that cover both third party and own damage — may be permitted soon. And hopefully, this benefit would to be extended to the four wheelers too at the earliest.
Meanwhile, here are the 'Ten key aspects of vehicle insurance that you must know'.
