Two-wheeler insurance policies to get cheaper, easier to buy
Comprehensive two-wheeler insurance policies
would soon get cheaper once policies with three-year validity come into effect.
Large insurance companies such as ICICI Lombard and Bajaj Allianz General Insurance, apart from
government-owned companies, are planning to launch policies with riders for
To enable long-term motor
insurance for two-wheelers, the Insurance Regulatory and Development
Authority (Irda) has introduced a long-term motor third-party insurance policy
for two-wheelers with a three-year term.
Irda said the total premium charged for the
third-party coverage would be three times the annual third-party premium for
two-wheelers as decided by the regulator. Motor third-party premium is
regulated by Irda and the regulator brings out revised rates for these policies
every year based on the claims experience. Third-party motor insurance is
mandatory in India.
The insurance regulator also said that the
premium would not be revised upwards or downwards during the period of the
policy. According to insurance industry executives, two-wheeler owners would
opt for these, since there would not be any premium fluctuations for the
three-year term unlike one-year policies where the premium would be revised
Sector officials said the firms would save costs
by not having to renew policies every year. This, they said, would be passed on
to customers in the form of discounts on the ‘own damage’ front. Customers
would also get an option to stay with their one-year policy or opt for a
Third-party motor insurance includes two parts,
own damage that protects the driver/owner from accidents and third-party cover
that covers liability from third-party accidents. Third-party cover is
mandatory, while own damage is optional.
General insurance companies have already planned
to launch products. Madhukar Sinha, national head (personal lines) at Tata AIG
General Insurance, said his company would file a product in tandem with the
He added add-ons could be offered with the
policies, subject to Irda approvals.
“With respect to the pricing of the product, we
are analysing the past trends for a suitable pricing mechanism.”
From April 1, 2014, third-party premiums in the
two-wheeler category were raised by 9-10 per cent, compared with the proposed
1-45 per cent across segments – sub-75cc, 75-150cc, 150-350cc, and more than
Sanjay Datta, head of underwriting and claims at Bajaj
Allianz, had earlier said the insurer would launch a motor third-party policy
for two-wheeler insurance after filing the
product with Irda. Thereafter, the company would file a comprehensive
two-wheeler plan, he added.
Irda also said that the entire premium would
have to be paid in one installment and insurers would not be able to cancel the
standalone third-party cover in any circumstances except for ‘total loss’. In
case of cancellation of policy under total loss, premiums for the full
unexpired years would be refunded. Non-life companies wanting to introduce these
policies will have to submit a letter of intent to Irda.
According to the regulator, since there is also
a need to have long-term comprehensive cover including own damage and
third-party covers, insurers can also file three-year term comprehensive policy
for two-wheelers. While the ‘own-damage’ motor segment covers losses to self
during accidents, motor third-party covers liability to a third-party caused by
a vehicle owner during an accident.
Source from : http://insuranceblog.asia/two-wheeler-insurance-policies-to-get-cheaper-easier-to-buy-2/