IRDAI Allows Standalone Own Damage Policy for Vehicles from September 2019

The Insurance Regulatory and Development Authority of India has allowed insurers to issue the standalone own damage policies for both new and old two-wheelers and cars on an annual basis. Which means, it would not be compulsory anymore to get bundled policies for two-wheelers and cars, as conveyed by the IRDAI, regarding a slight change in a circular issued in August implementing the orders of the Supreme Court.

As per the IRDAI, the insurers may continue with providing package policies besides standalone OD and TP policies, but long term, the standalone policy won’t be allowed for the present. In the previous year, IRDAI, in consideration of the Supreme Court’s direction, had introduced a longer term TP cover for new cars (3 years) and two-wheelers (5 years).

Puneet Sahni, who is the Senior Vice-President, Personal Lines UW of Raheja QBE, gave a thumbs up to the IRDAI’s decision. He expected the decision to prove good for the customers as it might decrease the OD (own damage) premium rates. However, the rates of the TP (Third Party) cover would remain the same as before for all the insurers as their tariff are fixed by the IRDAI.