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Pay a little more towards new vehicle purchase
Posted on: 30/Aug/2018 4:04:36 PM
Starting from Saturday, buyers may have to spend a little extra towards new vehicles. This is because the insurance regulator has mandated manufacturers to strictly provide only 3-year and 5-year policies to cars and 2-wheelers respectively starting from 1st September 2018.
With this, all the small car buyers i.e. cars under 1000cc, and 2-wheeler buyers can enjoy long term policies of 5 years without wanting to frequently pay out third party premium year-on-year.
However, the insurers want some extra time because they are yet not ready to incorporate the long-term policy system. So, they are on toes to seek the SC for an amendment. Putting their thumbs down, IRDAI has compelled and mandated to implement the system as stated by the regulator.
According to the IRDAI circular that abides by the directive rolled out by the SC, the insurers ought to provide only long term policies for cars and two wheelers with effect from 1st September so that there is no vehicle running in the city uninsured.
Speaking about this, the ICICI Lombard General Insurance Head says the long term policy is only applicable for third party insurance.
The regulator has prefixed the third party cover prices. And for long term insurance covers, the insurers may fix appropriate prices according to their own underwriting principles.
Speaking about this, Rakesh Jain, the CEO of Reliance General Insurance says this is a welcome move as a lot of insurers forget to renew their policies annually. We should work out on the premium amount.
