The Insurance Regulatory and Development Authority of India (IRDAI) has released the master circular for general insurance business. The master circular lists the changes in motor insurance policy from reasons for policy cancellation to mandatory ‘pay as you drive’ option.
Here are some of the changes made by IRDA in motor insurance :
1) No claim rejection
IRDA has said insurers cannot reject a claim if some documents are missing or are unavailable. “No claim shall be rejected for want of documents. All the required documents shall be called at the time of underwriting the proposal,” it states. But the insurers can seek more documents that are directly related to the claim settlement such as claim form, driving licence, permit, etc.
2. Timeline for claim settlement
The regulator has also set a timeline for settlement of the claim. After the policyholder makes a claim, the insurer must inform him about the time when the claim would be settled. The surveyors must be allocated within 24 hours. The insurer would be penalised in case of any delay in claim settlement beyond timeline.
3. Pay as you drive
Insurers have been asked to offer two options as the first choice at the time of buying a motor insurance policy — i) Pay As You Drive insurance cover, ii) A comprehensive cover that includes coverage for depreciation. Earlier the option of Pay As You Drive was not mandatory for the motor insurance customers.
Pay As You Drive covers are based on a simple principle that you should pay less premium for insurance if you drive less. If you are very sure about lower vehicle usage during the year then instead of a flat rate, you can pay the insurance premium as per your actual usage.
4. Insurance cancellation
The regulator has made significant changes in the cancellation of the policy as well. IRDAI says, “The insurer can cancel the policy only on the grounds of established fraud, by giving minimum notice of 7 days to the retail policyholder.”
Published: June 12, 2024, 11:30 IST
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