Planning a new car is not just about choice but cost as well. Higher the model of the car, more you end up paying. According to the latest verdict of Insurance Regulatory and Development Authority of India (IRDAI), vehicle owner needs to pay additional car insurance premium after 1st September 2018. So if you plan to buy a car above 1500 cc, say Skoda Rapid than you need to pay additional car Insurance premium of Rs. 21,907 or more. Price has gone high from Rs 23,897 to Rs. 45,804 approximately. This is because of the latest rule issued by (IRDAI). Both the rules are mandatory for any vehicle owners.
1st Rule – Third Party Insurance Cover
According to this rule, it’s mandatory to pay third-party insurance for a period of 3 years for car and 5 years for two-wheelers. Own damage insurance can be taken annually or in a lump sum for three years. While third-party insurance is compulsory after 1st September, own damage cover is choice of the vehicle owner. Since the annual charges for the vehicle are increased, car owners may end up paying more in case of the cars with engine capacity less than 1500 cc. You can always do the cost-benefit analysis and choose to pay the car insurance accordingly.
2nd Rule – Personal Accident Cover
Another reason responsible for the increase in car insurance premium is the personal accident cover. Earlier Insurance cover of Rs 1 lakh was provided for two-wheelers and Rs 2 lakhs for four-wheelers. For this coverage policyholder had to pay Rs 50 and Rs 100 excluding tax. With the new mandate, Personal accident (PA) cover of Rs 15,00,000 is compulsory for all the motor insurers. You have to pay Rs. 750 as the annual charges for the same.
Now Third party cover and the personal accident cover is mandatory for all the vehicle owners with applicable terms and conditions. You may still have flexibility in choosing the own damage (OD) insurance. Either you can go for annual cover or consolidated three years plan for your car.