IRDAI sets uniform ₹750 annual premium for the cover
The minimum Compulsory Personal Accident (CPA) cover for owner-drivers under the motor insurance policy has been increased to ₹15 lakh.
The enhanced, mandatory cover that came into force with immediate effect will lead to a higher annual premium of ₹750 and follows a directive from insurance regulator IRDAI.
At present, the minimum cover for two-wheelers is ₹1 lakh for which annual premium is ₹50 while for private cars/commercial vehicles the minimum cover is ₹2 lakh for ₹100. “A minimum capital sum insured (CSI) of ₹15 lakh shall be provided under CPA cover for owner-driver under liability only, under Section III of Package Policies to all classes of vehicles and bundled covers wherever applicable at the premium rate of ₹750 per annum for annual policy. This rate will be valid until further notice,” IRDAI said.
HC judgment
The decision comes in the backdrop of a Madras High Court judgment as part of which IRDAI was directed to enhance CPA cover to at least ₹15 lakh so that the amount “will add to some succour or solace to the victims of road accidents, who are the owner of the vehicle, who may incidentally sustain bodily injury or death.”
The CPA cover is provided to owner-drivers while driving the vehicle, including “mounting into/dismounting from or travelling in the insured vehicle as a co-driver,” Thursday’s IRDAI circular to insurers said.
At present, minimum CSI for two-wheelers is ₹1 lakh for which annual premium is ₹50 while for private cars/commercial vehicles the minimum cover is ₹2 lakh for ₹100. The new rates are in multiples of existing premium — at the rate of Rs.50 for a cover of Rs.1 lakh.
With the change, vehicle owners would be paying more for motor insurance. IRDAI decision comes close on heels of the annual revision of third party motor insurance rates that saw premium increasing for certain category of vehicles in April and subsequently longer term TPC made mandatory for two-wheelers and cars. Motorists are also feeling the heat on account of rising pump prices of petrol and diesel.
Insurers welcomed the increase in CSI under CPA cover. Bajaj Allianz General Insurance MD and CEO Tapan Singhel said the move is a step in the right direction. “I strongly believe that it’s vital to have an appropriate personal accident cover since it provides much needed financial support to the policyholder and their family members if she/he is disabled or succumbs to injury due to an accident,” he said.
Head-Product Development of SBI General Insurance Puneet Sahni said the move ensured that those exposed to accident risk are adequately covered for any unfortunate event.