Mandatory Personal Accident Policy Along with Bike Insurance, what’s changed?

Buying a set of two wheelers – be it a bike or scooty or scooter – is an exciting time in anyone’s life. A lot of research and deliberation goes in deciding the two-wheeler that you intent to buy and enjoy. At the same time, it is very important that we safeguard for the future needs of the two-wheeler along with our own contingencies. We are talking about insurance for you beloved bike or scooty, as well as insurance for self. And just in case we happen to forget about these, the government has made this compulsory along with a purchase of any vehicle – 4-wheeler or 2-wheeler – to buy insurance for the vehicle as well as for the owner/driver.

From time to time, government has updated their regulations, and the latest such change came in September 2018, when the cover for personal accident policy was increased, and consequently the premium also increased.

When did it happen?

The decision was rolled out in the month of September 2018. IRDAI issued a new set of guidelines to the insurance companies, in which they were asked to boost up the amount of sum insured related to CPA (Compulsory Personal Accident) cover. The cover is for owner-driver, and it has been increased to INR 15 lakh. This new rule has been applied not just to the two-wheelers but cars as well. The fixed premium that you as a bike owner have to pay is INR 750 per annum.

Knowing about the changes in detail

In the books of motor policy, the ‘owner-driver’ is the person on whose name the insured vehicle is registered. The owner-driver is eligible for a Compulsory Personal Accident component if he/she is carrying a legit driving license. According to the new directive, each and every motor policy should encompass personal accident protection. The same would offer a cover of INR 15 lakh to the owner-driver in case of death resulting from an accident while driving the vehicle.

Another change that has happened recently in the motor policy is related to the value of CSI or the Capital Sum Insured. In the case of motorbikes, it has been increased to INR 1 lakh. In the month of October 2018, the IRDAI issued another circular which added more clarity to the whole matter. They made it clear that at the time of buying a policy for a brand new bike, it is entirely up to the owner of the vehicle to decide whether he/she wants to go for a 1-year mandatory personal accident cover or the long-term one.

When purchasing a policy for a brand new bike, it has become compulsory to purchase a minimum of 5-year liability or Third Party policy. In addition, the insurance companies were also given a direction by the IRDAI that it is insurers’ duty to make sure that the customers are given the freedom of choosing between 1-year CPA and a multi-year one. Nevertheless, a lot of issues were raised by the customers regarding the redundancy of the said component, particularly by the ones who own multiple vehicles.

For this reason, the IRDAI came out with a fresh circular which unbundled the CPA part from the motor insurance policies. In other words, now bike owners may purchase the CPA component either with their basic policy or as a separate one. In case a customer wants to buy it from a separate insurer, he/she can buy it as a general personal accident product. Now, the single cover/product will remain valid for every vehicle owned by the customer (owner-driver). For example, if you have already purchased a PA cover from a separate insurer, the same policy will cover all your vehicles, and the coverage amount will be at least of INR 15 lakh. Without any doubt, this new directive has given more freedom and power to the customers. If you do not want to buy the Personal Accident cover under your bike’s insurance, you have the freedom to avoid that option.

More about the new guidelines

The IRDAI has permitted the insurance companies to price the insurance product as per their individual basic pricing system. But, the IRDAI has also made it clear to the insurance companies that if anytime the pricing method is not found in accordance with the actuarial principles, the authorities may issue necessary directions. Overall, it can be said that the whole system is being made more transparent and beneficial to the customers.

Without any doubt, buying a two-wheeler is easy; but it does come with a lot of responsibility. You have to remain careful on the road, even when you are riding alone. Accidents are unpredictable, which is why one must always keep their bike’s insurance papers up-to-date. Once you get yourself and your bike covered by a well-designed two-wheeler insurance policy, you would certainly feel more confident on the road. So, check out the policies that are available online; compare them and then choose the best among them.