Several vehicle manufacturers had expressed concerns about this mandatory cover adding to the cost of overall third-party insurance.
Insurance Regulatory and Development Authority of India's (IRDAI) move to give personal accident cover option for vehicle owners will have a positive impact, Vishnu Mathur, Director General at Society of Indian Automobile Manufacturers (SIAM), told CNBC TV18 in an interview.
The insurance regulator clarified on October 9 that insurers will have to provide both one-year and long-term plans to customers so that vehicle owners have options to chose from. It further added that the long-term personal accident (PA) cover is optional."The compulsory long-term Personal Accident Cover was increasing the
purchase price of the vehicle," Mathur said.
In a circular, IRDAI clarified that even if vehicle owners want to buy a one-year cover, they should be allowed to do so.
In September 2018, the IRDAI had said that car and bike owners will now get compulsory personal accident cover of Rs 15 lakh under their motor insurance policies. Earlier, the mandatory cover was Rs 2 lakh for cars and Rs 1 lakh for two-wheelers.
In July, the Supreme Court made it clear that third party insurance cover for new cars and two-wheelers should mandatorily be for a period of three years and five years, respectively.
Several vehicle manufacturers had expressed concern about this mandatory cover adding to the cost of overall third-party insurance.Watch the interview to know more...