Insurance Regulatory and Development Authority (IRDA), on August 13, allowed general insurance companies to offer three year third party motor cover for two-wheeler. Currently, all motor insurance providers offer one-year third party cover with annual renewal. Also, it is anticipated that a similar move may be replicated for four-wheeler and commercial vehicles as well.
Tenure of three-year coverage will be applicable only for third party cover, own-damage cover will have to be renewed every year.
“The three-year standalone third party insurance cover would provide convenience to the user and help insurance firm in collection of premium in one go,” states a news report.
The insurance regulator has said that the new policy has been introduced following representation from various general insurance companies for long term motor products.
"The Authority has perused the matter and decided to introduce Stand Alone Motor Third Party Insurance Policy for two wheelers for a period of three years subject to conditions," IRDA said in a release.
Sharing the details on the new move, IRDA further said that the user (insured/ policy holder) cannot revision his/her premium during the policy tenure. Also, there will be no cancellation of standalone TP (third party) cover, except in case of total loss where premium for the full unexpired years have to be refunded.
No change in other terms and conditions as against the one year products, the regulator added.