IRDAI is short for Insurance Regulatory and Development Authority of India. A regulatory body for the insurance sector in India, IRDAI ensures safe transactions and transparency among insurers and customers. IRDAI puts down regulations that need to be followed by insurance providers and policyholders so as to hold up both their interests.
IRDAI car insurance guidelines and how they help
Insurance companies providing car insurance and the policyholder purchasing the car insurance are supposed to follow a few rules and regulations defined by the IRDAI. These guidelines mainly pertain to pricing, product information, advertising of plans, etc. The purpose of these rules is to ensure quick claim settlements, elimination of fraud practices, and making insurance purchase a more transparent process.
As we know there are two types of car insurance policies – comprehensive car insurance and third party car insurance. Let’s understand the IRDAI guidelines for both.
IRDAI Regulations for Comprehensive Car Insurance Plan
To purchase a comprehensive car insurance policy is not mandatory. But since this cover offers extensive coverage, many insurance providers suggest you buy it. Below we have curated a list of IRDAI guidelines for Comprehensive car insurance. . Have a look:
- The insurance company must provide all coverage benefits offered under the third-party liability insurance cover
- The insurer must provide theft coverage if the claim is approved
- It is the responsibility of the insurance company to cover the cost of damage repair if the claim is approved
- Under comprehensive car insurance, coverage for man-made or natural calamities, and fire explosion damages, must be offered.
- The insurance provider is liable to pay the sum insured according to the terms of the Personal Accident Policy if the driver employed to drive the insured vehicle suffers death or disability.
IRDAI Guidelines for Third-Party Car Insurance Plan
Third-party car insurance coverage is mandatory by law. If you own a car, then it is necessary that you purchase third-party insurance. This insurance cover provides protection against third-party damage expenses.
- As per the clauses stated under the third-party insurance cover, the insurance company is supposed to compensate the third party for losses related to life or property caused due to the insured car (first party)
- In the unfortunate event of the death of a third party, the insurer must calculate the amount of compensation with respect to the net worth of the deceased individual. The final decision lies with the Motor Accidents Claims Tribunal.
- In case of third-party property damage, the amount of compensation will be according to the extent of damage caused by the insured car. This compensation will also be made by the insurance company. The amount can be up to Rs. 7.5 lakhs
- Any legal liabilities arising from an accident with a third party must be paid by the insurance provider
Given the regulations by IRDAI, purchasing car insurance becomes extremely transparent for car owners. Not only are insurers supposed to be conscious of what they offer, but they are also equally responsible for showing the exclusions upfront as well. The regulations have also gone a long way to encourage hassle-free, online insurance purchases as well. The Bajaj Finserv is one such platform where you can purchase car insurance through a fully digital buy process in minutes.
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