Anyone buying a twowheeler must purchase a fiveyear, third-party cover, and an annual personal accident cover. This is in addition to a comprehensive cover that is sold at the time of purchase of the vehicle. As a result, for a 150cc bike costing Rs 75,000, the insurance premium would be Rs 7,600. In the case of cars, the owner must pay premium for three years of third-party insurance and an additional Rs 750 towards a personal accident cover.
‘Some terms of insurance are not properly worded’
For cars, a three-year, third party insurance and additional personal accident cover is in addition to the comprehensive cover sold by the dealer. For the buyer of a car with engine capacity of over 1000cc, the payout towards insurance has doubled to nearly Rs 20,000 from Rs 10,000 earlier.
Last week, IRDAI clarified that the personal accident cover can be paid in instalments. However, insurance industry sources say that the rates are very high. Under the Pradhan Mantri Suraksha Bima Yojana, many non-life companies provide a personal accident cover of Rs 2 lakh for a premium of Rs 12. As against this, the prescribed Rs 750 premium for a Rs 15-lakh personal accident cover works out to Rs 50 per lakh.
According to Segar Sampath Kumar, former general manager at New India Assurance, there is also a need to change the terms of the cover. The policy as it stands says that compensation will be paid for bodily injury or death sustained by the owner-driver of the vehicle in direct connection with the vehicle insured or while mounting into/dismounting from or travelling in the insured vehicle as a codriver.
“The phrase ‘in direct connection with the vehicle’ is not properly worded. Whether the owner would get covered if he rides pillion on his two-wheeler or as a passenger in his car is not clear,” he said. Also, the term co-driver is neither defined in the policy nor in the Motor Vehicles Act.
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