Youth Incorporated Magazine

The IRDAI or the Insurance Regulatory and Development Authority of India is the regulatory body that governs the insurance industry in the country. The body has the responsibility of creating new rules, ensuring compliance, promoting insurance and regulating the same. In a bid to improve vehicle insurance and its coverage, the regulatory body has decided to increase the sum assured of the Personal Accident component.

What is PA?

Before we get into the details of the changes made, it is essential to understand what a Personal Accident cover in vehicle insurance means in the first place. As you would have already made some guesses by now, it offers you protection should things become unfavourable during any of your trips or driving excursions.

In the event of an accident, which leads to disablement of the driver or in the worst case, his/her death, the cover would offer financial assistance. In simple words, if a policyholder meets with an accident and the result is a disability or death, the policy would compensate for the same. A personal accident cover usually comprises of temporary disability, permanent disability and accidental death.

Existing Clauses

Back in September 2018, the regulatory body issued a circular to all the insurers to increase the Personal Accident (PA) Cover for owners and drivers up to INR 15 Lacs. This would result in a premium of INR 750 per annum for this increase in coverage. The registered owner of a vehicle is eligible for PA compensation in the event they meet with an accident.

As per this new regulation, all vehicle owners would be eligible for a compensation of INR 15 Lacs in the event that they meet with an accident (disability/death). Prior to the introduction of this regulation, the maximum sum assured for the same PA component was at INR 2 lacs for cars.

Along with the above changes, the IRDAI has made is clear that for new car insurance, it is the wish of the owner to opt for a one-year personal accident cover or to opt for a three-year personal accident cover. This clause comes into the picture because as per recent amendments, the IRDAI has made it mandatory for owners to buy a 3-year third-party liability policy. As an extension of the ruling, the IRDAI has strictly directed insurers to leave it up to the vehicle insurance owners to opt for a single year or multi-year personal accident cover.

Current Amendments

There were some concerns regarding the changes made in September 2018. There were a lot of customers who had bought a separate personal accident cover from elsewhere. And there were several owners who had more than one vehicle registered to their name. The additional AP would deem redundant for a lot of them.

Keeping the above suggestions and complaints in mind, the IRDAI came up with another amendment to unbundle the PA component from new car insurance. Here is all that you need to know.

• Effective from the 1^st of January 2019, customers can choose if they want to buy the Personal Accident component as a part of their new car insurance or as a standalone product from a general insurer.
• The only clause being, the cover of the policy should be at least INR 15 Lacs. In such a case, you need not buy the PA from as a part of your vehicle insurance.
• Going forward, the PA from the vehicle insurance will be unbundled and allowed to be sold as a cover only after the permission of the policy buyer.
• If you have purchased your car insurance online in the past few months, you might have paid for the additional PA component. Going forward if you wish you wish to buy car insurance online or via other modes, you will have the option to add or remove the PA depending on the personal accident cover that you already have.

Buying car insurance online also lets you benefit from lower insurance premiums without ever having to compromise with the features and benefits on offer. And with the unbundling, if you already have a personal accident cover, you might end up paying slightly lower premiums as well. Those who have purchased any policy online would be well aware of the hassle-free and less documentation nature. Policy buyers who seek a simple way of renewing their policy, doing so online is the most rewarding option out there.