IRDAI Redefines Long Term Comprehensive Insurance Policy For New Cars

Back in September 2018, the Insurance Regulatory and Development Authority of India (IRDAI) had issued an order allowing all general insurers to offer long-term comprehensive motor insurance policies to new car buyers. After almost two years, the order, which had numerous shortcomings, will see a major change from August 2020.

A comprehensive motor insurance policy mainly consists of two covers: Third Party (TP) and Own Damage (OD). Insurers were allowed to sell a bundled plan with 3-year validity for both the aforementioned covers. Another bundled plan was available consisting of a 1-year OD cover along with the 3-year TP cover.

The IRDAI has now made a change in the ruling which states that while the 3-year third-party cover is still mandatory, insurers can only bundle the plan with a 1-year OD cover. This means that the OD cover will have to be renewed annually. Here are some of the reasons given by the IRDAI for this decision:

• Affordability of long-term policies.

• Potential mis-selling.

• Confinement of policyholders to the same insurer.

• Non-uniformity in the No Claim Bonus (NCB) structure.

With the withdrawal of the long-term comprehensive motor insurance policy, customers can finally breathe a sigh of relief. Customers will no longer have to worry about the piggybacking high cost of insurance while buying a new car. If you need help choosing the right policy, head to Insurance Dekho for suitable insurance policies at great prices. 

• New Car Insurance - Save Upto 75%* - Simple. Instant. Hassle Free - (InsuranceDekho.com)

• Health Insurance Policy - Buy Online & Save Big! - (InsuranceDekho.com)