IRDAI Allows Single Personal Accident Cover for Multiple Vehicles: All You Need to Know!

Come January 1, 2019, customers will not have to purchase separate compulsory personal accident (CPA) covers for each new vehicle they buy. The Insurance Regulatory and Development Authority of India (IRDAI) released a notification in this regard, effectively unbundling this from the insurance cover than you buy for your vehicles.

Till now, with every new vehicle you bought, you were effectively buying separate personal accident covers for the same person – yourself.

What is the Compulsory Personal Accident cover and what does it cover?

The Compulsory Personal Accident cover is effectively an insurance policy that is mandated for every person who owns and drives a vehicle.

The owner of an insured vehicle holding an ‘effective’ driving license is termed as Owner-Driver for a personal accident cover. The cover is provided to the ‘Owner-Driver’ while driving the vehicle or riding in the vehicle, covering their death and disability.

What is third-party motor insurance?

A statutory requirement under the Motor Vehicles Act, ‘third-party’ cover provides for the liability for death/disability of third-party losses or damages to third-party property, from your vehicle.

Earlier this year, a CPA of ₹15 lakh sum assured, which costs ₹750, was made mandatory with every vehicle insurance policy.

What has changed?

Until now, the CPA was bundled along with the vehicle insurance that you are required to maintain, for every vehicle you own. Hence, for every vehicle you own, you ended up owning a Personal Accident Policy for yourself.

If you think about it, a person can only drive one vehicle at a time, and hence, duplicating the personal accident policy for the same person across multiple vehicles is a complete waste.

The New Regulation

Starting January 1, vehicle owners will have the choice of buying a standalone personal accident cover or purchase it as a bundled product along with their third-party motor insurance.

This means that anyone who owns two or more vehicles can purchase a single compulsory personal accident cover, which will be extended to all the vehicles owned by the policyholder and will be valid for one year.

The notification clarifies, “Since a general personal accident cover also includes cover against motor accidents, if an owner-driver already has a 24-hour personal accident cover against Death and Permanent Disability (Total and Partial) for CSI of at least ₹15 lakh, there is no need for a separate CPA cover to be taken.”

With passenger vehicle sales in India crossing the three million mark for the first time in 2016-17, this number has only been steadily increasing. These measures will ensure that customer interests are safeguarded.

(Edited by Shruti Singhal)

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