Your vehicle insurance policy may soon look very different, especially in the personal damage section. An exposure document to review the current vehicle’s damaged product structure has been produced by the Insurance Regulatory and Development Authority of India (IRDAI). # *
Executives made some of the working group’s agreed recommendations to review the product from the industry. The following six significant changes should be noted:
- Customisable Premiums
The suggestion that telematics be considered when calculating premiums has received the most attention. Telematics data from multiple sources might flow into a single pool by being stored in a central repository. The working group suggested that the Insurance Information Bureau of India (IIBI), a data repository for vehicle insurance companies, maintain the data and ensure its security.
- Friendly Depreciation Guidelines
For claims of partial losses, age-based depreciation of vehicles will be implemented. Depreciation calculations for different parts and materials, such as glass, fibre, and plastic, can confuse ordinary consumers. The new ideas will simplify the rules. Depreciation for all aspects has been recommended using a uniform grid. *
- New Sum Insured Computation
For private autos and two-wheelers, the IRDAI has specified new guidelines for calculating the sum insured/insured declared value (IDV). #
According to one of the ideas put up by the working group, the sum insured for older private cars will henceforth be the manufacturer’s current quoted price less adjusted age-wise depreciation. Another option covers the current-day on-road price of the vehicle, including invoice value, for the first three years for new cars.
- Determine The Amount Of Your Auto Insurance
It is estimated that the total invoice value will be Rs. 11.5 lakhs (ex-showroom price: Rs. 10 lakhs, registration fees and taxes: Rs. 1.5 lakhs); from the sixth renewal on, the IDV/SI will depend on the insurer. Depreciation on the current ex-showroom pricing. Option-A (proposed): Depreciation on the price from the showroom. Depreciation on the total invoice value is Option B’s (proposed) replacement. *
- Improved Flood Damage Insurance
Today’s standard motor insurance does not cover engine damage brought on by water infiltration. The policyholder must purchase an additional add-on. The base policy will apply if draft norms are finalised in their current form.
- No-Claim Bonus Slabs
IRDAI has suggested a common grid for the no-claim incentive. Currently, each insurance company’s NCB slabs for long-term contracts are unique. When a customer wishes to switch insurers, this can become a task. This problem will be solved with the aid of a uniform NCB grid. # *
A motor insurance calculator is a convenient tool you may utilise online to check the amount of coverage needed based on your requirements.
Current compulsory deductibles will be called standard deductibles, and a new set of revised deductibles has been proposed. Mandatory deductibles are the amount that the policyholder must pay before the insured processes the claim. For instance, the policyholder for a two-wheeler will be responsible for paying either 1% of the insured amount or Rs. 500, whichever is more extensive, in the event of claims, including total losses. *
* Standard T&C Apply
# Visit the official website of IRDAI for further details.
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