New Delhi:-The Insurance Regulatory and Development Authority of India has discontinued long-term motor insurance plans.
As per a recent mandate issued by the Insurance Regulatory and Development Authority of India (IRDAI), long-term motor insurance packages that cover both own damages (OD) and third-party (TP) damages, will be discontinued.
The change will come into effect from 1 August 2020 and will only apply to those cars that have been purchased post this date.
As per the older 2018 policy, it was mandatory for a four or two-wheeler owner to have third-party insurance, 3-years for cars and 5-years for bikes and scooters. They could also buy long-term comprehensive insurance which bundled OD and TP for a longer period.
As per sources at insurance portal RenueBuy, however, the new mandate requires a vehicle owner to have just 1-year third-party insurance as mandatory and they can opt for 1-year OD cover with it while making the purchase. All long-term TP and OD insurance plans have been discontinued.
The fact that buying long-term third-party insurance is no longer mandatory implies that the owner does not have to pay extra money for 3-years of TP insurance which gets added to the overall price while buying the vehicle.
So the money you were paying for a 3-year package for cars and 5-year package for two-wheelers now comes down to just a 1-year payment.
To break it down, if the ex-showroom price of a Maruti Suzuki Ciaz Delta (Automatic) is around Rs 9.97 lakh in Delhi, you earlier had to pay the RTO: Rs 72,168, MCD: Rs 4,000, Fast Tag: Rs 600 and the Insurance (3yr TP + 1yr OD): Rs 36,291 – which brought the on-road price of the car to Rs 11,10,689.