IRDAI Rules for Car Insurance

The authority created and executed the IRDAI auto insurance rules in order to promote a uniform and equitable procedure for the issuance, renewal, and handling of auto insurance claims in India. In addition to safeguarding clients, these regulations are intended to encourage accountability, openness, and dependability among insurance companies.

Rules for Auto Insurance for Third Parties

The IRDAI strictly regulates third-party auto insurance, which is required for all vehicles on Indian roads:

1. Third-party liability insurance is a need for all vehicles, guaranteeing that any harmed third parties can get reimbursement.
2. Premium Rates: The authority sets a structure that insurers have to follow when it comes to third-party premium rates, and it does so on an annual basis. The vehicle's make, model, and engine capacity are taken into account while determining the rates.
3. Unlimited Liability: This ensures that third-party claimants receive sufficient compensation because there is no upper limit on the liability covered for claims involving death or bodily injury.

Rules for Comprehensive Car Insurance Protection

The comprehensive policy is essential for total protection even though it is not required. Among the rules are:

1. Policy Structure: To guarantee that policyholders are completely aware of their coverage, insurers must provide a clear explanation of the policy's terms, conditions, exclusions, and inclusions.
2. Add Ons: In order to increase protection, providers may offer add-on covers; however, each add-on must be submitted to and accepted by IRDAI.
3. Calculating Premiums: Insurance companies are free to choose how much to charge for comprehensive plans, but they must follow an open and honest procedure.

General Exclusions of a Car Insurance Policy

The IRDAI requires policyholders to be informed of general exclusions in writing.

1. Normal Wear and Tear: This clause does not cover any damage brought on by the vehicle's regular deterioration over time.
2. Mechanical Breakdowns: Usage- or age-related failures of mechanical components are not covered.
3. Drunk Driving: Any harm incurred while operating a vehicle while under the influence of drugs or alcohol is not covered.
4. Invalid motorist's Licence: Any claim made during this time will not be accepted if the motorist does not possess a valid driver's licence.

IRDAI's Customer Turnaround Time

IRDAI has established stringent deadlines for a number of customer service-related areas:

IRDAI's New Car Insurance Regulations

The IRDAI often updates its regulations to reflect changes in the market:

1. Multi-Year Policies: To guarantee long-term coverage, multi-year third-party policies are being introduced for new cars.
2. Personal Accident Coverage: In order to provide drivers and owners of vehicles with greater protection, mandatory long-term personal accident coverage was implemented.
3. Third-Party Premiums: Every year, IRDAI updates the third-party premium rates to reflect prevailing market conditions and trends.
4. IRDAI Regulations for Notifications of Car Insurance Renewal: To encourage customers to renew on time, insurers are compelled to issue renewal notices at least 30 days before the policy expires.
5. No-Claim Bonus Transfer: If a policyholder chooses to change insurers at the time of renewal, the no-claim bonus ought to be transferred without any problems.

Rules for Total Loss in IRDAI

If the cost of repairs is more than 75% of the IDV, the car is deemed a total loss. In these situations, insurers ought to resolve claims quickly and give the policyholder the IDV as payment.

Car insurance renewal rules set by IRDAI

IRDAI has set rules stating that the policy must be renewed regularly and in time for continuous safeguard of your vehicle. In case of gaps, the insurance company is not liable to pay the cost of damage that occurred when the policy was not in effect.

If the car owner doesn’t renew the car insurance policy within 90 days, then he/ she would have to lose all No Claim Bonus (NCB) related benefits and the same will drop to zero. This would entail paying a higher premium and also would involve going through an extensive inspection of the vehicle.

Depreciation and IDV Guidelines according to IRDAI IDV Calculation

1. IDV: IDV is determined by deducting depreciation from the manufacturer's advertised selling price. It is the highest amount guaranteed in the event of a complete loss.
2. Depreciation plan: To assist insurers in estimating claim amounts for repairs and replacements, the authority has established a depreciation plan for automobiles and parts.

The rate of depreciation on a vehicle depends on several factors, with age being the predominant one. Here's a general guideline used by most insurance companies in India:

• First 6 months: Vehicles that are less than 6 months old usually don't experience depreciation.
• 6 months to 1 year: A depreciation rate of 5% is applied to vehicles in this age range.
• 1-2 years: Cars that are between one to two years old tend to see a depreciation rate of around 10%.
• 2-3 years: The depreciation rate for vehicles in this category is around 15%.
• 3-4 years: For vehicles that are three to four years old, a depreciation rate of 25% is typically applied.
• 4-5 years: Cars falling in this age group experience a depreciation rate of 35%.
• 5-10 years: Vehicles aged between five to ten years have a depreciation rate ranging from 40% to 50%.
• Above 10 years: Cars older than ten years can see a depreciation of 50% or more