If you are worried about your motor insurance claim being rejected because of your inability to get your Pollution Under Control (PUC) certificate renewed, you can heave a sigh of relief.
The Insurance Regulatory and Development Authority of India (IRDAI) has clarified that motor insurance claims cannot be denied if the policyholder does not hold a valid PUC certificate, quashing ‘misleading’ media reports. Similar messages had also gone viral on social media platforms, creating panic, especially amongst policyholders who were unable to obtain PUC due to the partial lockdown.
The genesis of the misconception lies in IRDAI’s circular dated August 20, reiterating that general insurance companies must ensure that vehicles have a valid PUC at the time of renewal. “The Central pollution control board (CPCB) has raised concerns regarding status of compliance of above direction of Honourable Supreme Court of India in National Capital Region of Delhi (Delhi – NCR),” the IRDAI had said, directing insurers to ensure compliance with the SC order. The original IRDAI circular, issued in July 2018, was prompted by the SC’s verdict in 2017, which mandated PUC for issuing insurance policies.
“The IRDAI circular dated August 20 never mentioned claim settlement. It was always clear that PUC is needed at the time of renewal and not claim settlement. There was no reason for the confusion in the first place,” said a senior executive at a private general insurance company, speaking on the condition of anonymity. The list of documents needed for claim settlement, including the registration certificate, driving licence and First Information Report in the case of accidents, are clearly mentioned in the policy document. “Insurers will not insist on any document that is not mandatory as per policy terms and conditions for claim settlement,” he added.
An in-force PUC, though, is required for insurance renewal and purchase. “PUC is mandatory and customers would be required to submit the valid PUC at the time of buying motor insurance. It acts as a validation that the vehicle has permissible emission levels. Moreover, it ensures the road worthiness of the vehicle once it has undergone the fitness test and has a valid PUC in place,” says Indranil Chaterjee, Principal Officer and Co-founder, Renewbuy.
Meanwhile, the General Insurance Council (GI Council) on Thursday clarified that the extension of validity of vehicle-related documents by the Ministry of Road Transport and Highways does not apply to motor insurance policies. “All vehicle owners are advised to get their insurance policies renewed on or before the due date of renewal for continued validity of the insurance policies,” it said in an official release.
The Ministry had, on August 24, issued a notification extending the validity of such documents – that had expired after February 1, 2020 - until December 31, 2020. Some industry experts feel the circular ought to have offered greater clarity, particularly regarding PUC. “The government circular should specifically mention PUC as one of the documents to be exempted till December 31 for renewal of policy. IRDAI has simply instructed all insurer on the SC directive. Government should take cognisance of the same and amend their circular so that renewal of policy is not stuck,” says Saroj Kanta Satapathy, Chief Operating Officer, JB Boda Insurance and Reinsurance Brokers.