Before you go ahead with buying motor insurance for your vehicle, take a look at the regulations laid down by the supreme insurance regulatory body, IRDA.
In India, buying a motor insurance is mandatory under the Motor Vehicles Act, 1988, in the absence of which, driving the vehicle on road is a punishable offense. This means that as soon as you purchase a new vehicle (two-wheeler or four-wheeler), the first thing you’re required to do is buy a motor insurance for the vehicle. You can even do so online but all you need to take into account is the IRDA guidelines for buying motor insurance in India.
What is IRDA Full Form?
IRDA is the abbreviated form of Insurance Regulatory and Development Authority. It is the supreme body in the insurance industry, responsible for laying out rules and guidelines for policyholders buying different forms of insurance – personal, group, commercial, Life Insurance, motor insurance, and the like.
The IRDA has certain guidelines in place for buying motor insurance, which we’ll describe here in detail to help you get a fair understanding before buying one for your vehicle.
IRDA Guidelines for Third-Party Motor Insurance
Third-party motor insurance is designed to offer financial protection to the vehicle owner against any third-party loss or damage, i.e., harm caused to a third-party person or property on account of the insured vehicle.
Here are the basic rules laid out by IRDA with respect to third-party vehicle insurance:
- In case of an unfortunate death of a third-party individual due to an accident by the insured vehicle, the insurance company would need to compute the total compensation due to the third party after taking into account the net worth of the deceased third party.
- The insurer would bear the expense for all legal liabilities due to an accident of the insured vehicle with a third party.
- The insurer would also need to bear the cost of damage caused to third-party property by the insured vehicle in accordance with the extent of damage caused. This amount may be up to Rs. 7.5 lakhs.
IRDA Guidelines for Comprehensive Motor Insurance
As suggested by the name, a comprehensive insurance policy is designed to provide complete or total coverage to the insured vehicle, beyond the one offered by third-party insurance. In India, buying comprehensive coverage is not mandated by law (only third-party insurance is); however, it is highly recommended to go for the former to receive total protection against damages.
Here are some basic rules laid out by the IRDA with respect to a comprehensive motor vehicle insurance policy:
- In the event of an accident claim involving the insured vehicle, which has been approved by the insurer, the latter would bear all responsibility for the cost involving repairs of damages to the vehicle.
- The insurer would be responsible to offer complete coverage under the Third-Party Liability Insurance Plan.
- In case of an approved claim for coverage of theft of the vehicle, the insurance company would need to provide total compensation to the insured.
- The comprehensive motor insurance plan would provide coverage against both natural calamities (floods or earthquakes) and man-made disasters (theft or fire) causing damage to the insured vehicle.
IRDA Guidelines for Claim Settlement
As per the rules prescribed by the IRDA with regard to settlement of claims involving the insured motor vehicle, it is clearly stated that all claims must be settled (approved or rejected, as the case may be) within 30 days from the date on which the required documents had been received from the insured. Of course, the time taken for claim settlement would also depend on the nature of the claim raised as well as the subsequent investigation needed in the process.
>>IRDA Health Insurance Claim Settlement Ratio
IRDA Guidelines for Customer Turnaround Time
The IRDA prescribes certain regulations regarding the general turnaround time for all insurance companies to get back to their customers with respect to redressal of grievances, claim settlement, or any other customer queries and issues. This helps ensure fair and timely transactions between the insurer and the policyholder. Here is a list of the turnaround time guidelines as laid out by the IRDA:
|Nature of Request||Customer Turnaround Time|
|Receiving copy of the proposal||30 days|
|Surveying the site of accident and the damaged vehicle||Within 48 hours from the time of appointing the surveyor|
|Request for another survey||Within 15 days from the date the receipt for previous survey was received|
|Seeking additional documents from the insured||7 days|
|Acknowledgment of customer grievances||3 days|
|Total time taken for policy issuance or cancellation||15 days|
|Surveyor appointment for conducting survey||Within 72 hours the loss/damage was communicated to the insurer|
|Survey report submission by the surveyor||15 days|
|Submission of Addendum Report||15 days|
|Claim approval/rejection from the date of survey report receipt||30 days|
|Resolution of customer grievances||15 days|
Motor Insurance General Exclusions
The following are certain excluded items that cannot be raised as claims as part of a vehicle insurance policy:
- Any damage purposely intended on the vehicle
- Any damage caused to the vehicle during the time the insurance policy was inactive
- Any damage caused to the vehicle while driving outside the specified geographic boundaries of insurance
- Any damage caused to the vehicle owing to an electrical or mechanical failure
- Any damage caused to the vehicle under the influence of alcohol or intoxicating substance
- Any damage caused to the vehicle due to illegal racing or criminal act
- Any damage caused to the vehicle as a result of non-compliance with traffic rules
- Any damage caused to the vehicle due to regular wear and tear of the machinery
Read More: Guide to car insurance Claim in Total Loss
Summing it Up
Motor Insurance is mandatory for every vehicle owner for their own safety, so as to insure their vehicle against all forms of damage and loss in the future. The IRDA specifies certain guidelines for the insurance companies to facilitate smooth and timely redressal of grievances and settlement of claims for the policyholders. For more information on IRDA rule specifications, you may refer to IRDA online by visiting their official website – irdai.gov.in
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