In the good news coming for multiple vehicle owners, the Insurance Regulatory Development Authority of India (IRDAI) has announced that a single personal accident cover will be enough for multiple vehicles.
The notification of the IRDAI said, “Since a general personal accident cover also includes cover against motor accidents if an owner-driver already has a 24-hour personal accident cover against Death and Permanent Disability (Total and Partial) for CSI of at least Rs. 15 lakh, there is no need for a separate CPA cover to be taken.” The above notification will be effective from January 1. According to this customers will now not have to purchase different compulsory personal accident (CPA) cover for each of their new vehicles and a single CPA cover will suffice the requirements.
Currently, a vehicle buyer has to buy different CPA for every new vehicle. In the month of September, the insurance regulator had raised the minimum cover for owner-driver to Rs. 15 lakh for an annual premium of Rs. 750. Before this, the CSI i.e. capital sum insured for two-wheeler was Rs. 1 lakh and for private cars/commercial vehicles was Rs. 2 lakh. Head of Product Strategy, ACKO General Insurance, Animesh Das said, “Currently, an individual vehicle owner has to buy a compulsory personal accident cover of Rs 15 lakh at cost of Rs 750 with his vehicle insurance. This has to be mandatorily taken with every vehicle insurance policy. In the case where a customer has multiple vehicles, he may end-up buying CPA cover for more than one vehicle, which is unnecessary.”
The IRDAI circular also said, “Keeping in view the date of implementation, as an interim measure, insurers may price the product in accordance with their general pricing philosophy, based on actuarial principles for the risk in question.” Furthermore, IRDAI also asserted that if they found that the pricing approach is not in sync with actuarial principles, a suitable direction would then be issued.
The changes have been brought in forward after incorporating feedback from various quarters wherein it was pointed out that many owner-drivers already have existing general personal accident covers which ought to be considered. Onkar Kothari, Compliance Officer at Bajaj Allianz General Insurance, said that the recent circular laid out by the IRDAI on the CPA cover has provided a clarification in line with the Indian Motor Tariff provisions.
Recently IRDAI also delinked the personal accident cover from the vehicle third party insurance. Reacting positively to the development, Ashish Kale, President, Federation of Automobile Dealers Association said, “With this announcement sentiment of the auto sector will improve. The cost of personal accident cover in bundle was very high compared to an independent policy. IRDAI has done a very good job in delinking the personal accident cover and third party insurance. It will benefit customers and as well as improve the sentiment.”
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