The Insurance Regulatory & Development Authority (Irda) has eased the rules for compulsory personal accident (CPA) cover that an owner-driver must have.
In a recent circular, the regulator said individuals need not take a separate cover if they already have a personal accident policy covering death and permanent disability (total and partial) with sum insured of at least Rs 15 lakh.
The regulator has also given individuals the option to take the cover as part of the motor insurance policy or go for a standalone CPA.
At present, General Regulation (GR)-36 of the India Motor Tariff (IMT), 2002, mandates general insurance firms to provide the accident cover for owner-driver under both liability only and package policies. The owner of the insured vehicle holding an effective driving licence is termed as owner-driver.
Earlier, the sum insured was Rs 2 lakh for four-wheelers and Rs one lakh for two-wheelers. The premium was set at Rs 100 and Rs 50, respectively.
The regulator in September mandatorily enhanced the personal accident cover to at least Rs 15 lakh following representations that this accident cover was not enough to provide relief to those sustaining injury or death in road accidents and an order from the Madras high court.
Insurance companies subsequently charged a premium of Rs 750.
However, the industry later pointed out that many owner-drivers already had general personal accident cover and many owner-drivers with more than one vehicle do not have to take more than one cover. The regulator then came out with a clarification on December 11.
“The recent circular by Irda on the CPA cover has provided clarification in line with the Indian Motor Tariff provisions. With effect from January 1, 2019, an option will be available to the customer to take CPA cover as part of the package policy or liability only policy or to go for standalone CPA policy. The insurers have been asked to file the standalone CPA as a product under the file and use guidelines along with its pricing,” said Onkar Kothari, compliance officer and company secretary, Bajaj Allianz General Insurance.
“Further, if an individual has a personal accident policy covering death and permanent disability, total as well as partial, with a sum insured of at least Rs 15 lakh, he or she need not take a separate cover, neither with the motor policy nor standalone,” Kothari added.
Sources said if a person had more than one car (or has one car and one two-wheeler), that individual does not have to take two CPAs. This is subject to the condition that the individual is owner-driver for both these vehicles and has a personal accident cover of at least Rs 15 lakh.
Irdai has given freedom to insurers to price the standalone personal accident cover for owner-driver. However, the duration of such a cover has been fixed at one year.
