The insurance regulator has decided to withdraw long term package covers offered for 3 years or 5 years for new cars and two-wheelers which is going to happen from August 1 this year. That said, new-vehicle owner’s need a mandatory third-party for 3 years and 5 years for cars and two-wheelers respectively and that own damage policy becomes optional.
A few years back, the act of long term motor insurance was issued from September 2018 by the supreme court where it should be necessary for all the purchase of new cars there should be a compulsory long term third party insurance package so that all the vehicles running in India had valid insurance covers. A few years back the customers were given choices to pick OD plans which had covers against theft, natural calamities or accidents. The package for cars is 3 years and that of two-wheelers is 5 years which they should pay an extra amount and that increased the cost of cars and other vehicles as well.
The Insurance Regulatory and Development Authority of India (IRDAI) has decided to withdraw the long term motor insurance package policy and which is going to happen from August 1, 2020. This news has got all the ears of the people since it reduces the price of cars or two-wheelers in India where it encourages people to buy vehicles. So, the customers are given an option to pick the long term motor insurance. With this act, the customers will be free from no choices since, before all this, the policyholders were really forced to buy these long term motor insurances and also no flexibility to change to other options. It has been noted that this forced selling is due to the financial interest or being linked to the loans. Also, the No Claim Bonus or NCB was not uniform among the insurer and which lead to a lot of dissatisfaction with customers.