Insurance regulator IRDA has increased the mandatory personal accident (CPA) cover for owner-driven vehicles under motor insurance policies from Rs 2 lakh to Rs 15 lakh.
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Insurance regulator IRDA
Insurance regulator IRDA has increased the mandatory personal accident (CPA) cover for owner-driven vehicles under motor insurance policies from Rs 2 lakh to Rs 15 lakh. For this, car owners will have to pay an annual premium of Rs 750.
The insurance regulator has taken this step on the directions of the Madras High Court. IRDA has issued a circular on September 20 asking all insurance companies to issue such cover from the date of receipt of this circular. However, insurance companies have been given time till October 25, 2018 to provide such cover.
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how much was the first premium
At present, the personal accident cover (PAC) limit was fixed at Rs 1 lakh for two wheelers and Rs 2 lakh for private or commercial cars. The premium charged for the car was Rs 100, which does not include taxes. PAC stands for the individual driver of the vehicle. Optional personal accident cover is also available for co-travellers. Some insurance companies also provide more cover at an additional premium.
Now 7 times more premium will have to be paid
Now the Insurance Regulatory and Development Authority of India (IRDA) has asked insurers to provide mandatory personal accident cover of minimum Rs 15 lakh for owner-driven vehicles at an annual premium of Rs 750. Companies can provide more cover in multiples of Rs 1 lakh or Rs 5 lakh but the minimum cover will remain Rs 15 lakh.
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what happens in this cover
Personal accident policy not only covers death but also covers disability. The amount of compensation is decided on the basis of injury as follows:
- 100% on death
- 100% damage to both legs or both eyes or one leg and one eye
- 50 percent in case of loss of one hand, foot or one eye
- 100% on permanent disability due to injury other than those specified above
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Read Also:Â if you are Riding a bike without two-wheeler insurance? Be ready to pay the penalty
What will be the effect on your pocket
If you look at this move along with the new rules issued for third-party insurance of IRDA, then it will have a huge impact on your pocket. IRDA has made third-party premium mandatory for motorcycles for 3 years and for cars for 5 years. In such a situation, now this new step will have a big impact on your pocket. Tarun Mathur, Chief Business Officer-General Insurance, Policybazaar.com, says that one year insurance for a car will cost Rs 650 plus GST and for a motorcycle Rs 700 plus GST will have to be paid.
