In June, the Insurance Regulatory and Development Authority of India (IRDAI) directed insurance companies to stop selling long-term vehicle insurance policies to new vehicle owners as of August 1, 2020.
As we get closer to August, we would like to take a moment to remind you that vehicles will become cheaper starting next month. Why? Well, because the Indian Insurance Regulatory and Development Authority (IRDAI) issued a new order in June, as it ordered insurance companies were ordered to stop selling long-term vehicle insurance policies to new vehicle owners. The new rule, which comes into effect on August 1, 2020, will reduce the on-road price of new cars and two-wheelers.
Well, let’s make a little bit of explaining. Comprehensive long-term policies for cars are offered for three years, while two-wheelers policies are offered for five years. As a package So, come August 1, this long-term insurance policy will be canceled. Since new car buyers will not be required to pay three or five years of insurance at one go, the price of new vehicles will decrease as a result.
So what kind of car insurance or two-wheeler insurance people will have to buy? Well, new vehicle owners will have to buy third-party motor insurance on a mandatory basis, albeit for longer terms. When buying a car, one will have to buy a third party car insurance policy for three years. Whereas, if you choose a new two-wheeler, you will need to purchase a third-party two-wheeler insurance policy with a duration of five years.
But what about insuring your own vehicle against damage? Therefore, you can buy a package policy, i.e. one that includes both third-party insurance as well as own-damage, or simply buy a standalone own-damage vehicle insurance policy.