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Vehicle Insurance: Accident Cover For Owners Increased To Rs 15 Lakh

When you buy a vehicle insurance policy, the insurance company offers personal accident cover. The personal accident cover can be considered as an add-on benefit. The accidental insurance is offered by various banks when you go for a debit card. A small premium will be collected by the agency in covering the risk. If you buy a package policy, the personal accident cover will be included. With the recent changes in insurance regulations, it is possible to get up to Rs. 15 lakh as personal accident cover.

What is a personal accident cover?

  • Motor insurance policy comes with personal accident cover which is applicable to the owner and the driver automatically.
  • The coverage of the driver is included as per the Workmen’s Compensation Act.
  • The personal accident cover for other persons will be issued by paying an additional premium.

Current PA cover

As per the current regulations, the PA cover car driver is Rs. 2 lakhs

The PA cover for two-wheeler is Rs. 1 lakh

The optional PA cover varies between Rs. 50,000 and Rs. 2 lakh

Payment of sum assured

The sum assured will be paid as per the following terms:

  • Death of owner-driver – 100% sum assured
  • Loss of two limbs – 100% sum assured
  • Permanent total disablement – 100% sum assured
  • Loss of one limb – 50% sum assured

Current premium rates

For private cars

  • Owner driver – Rs. 100
  • PA cover for additional passengers – Rs. 5 per every Rs. 10000 of sum assured
  • Liability for employees – Rs. 50
  • Legal liability for the paid driver – Rs. 50

For two-wheelers

  • Owner driver – Rs. 50
  • Liability for employees – Rs. 60

Features of personal accident cover

You should be aware of the features of personal accident cover. The insurance company is liable to pay 100% of the sum assured when you make a claim after the accident.

The following risk factors are covered by the policy:

  • Disability cover – If there is permanent disability due to the accident, the insurance company will pay compensation to the insured.
  • Partial disability cover – In some cases, there will be permanent particle disability. In this case, a percentage of the sum assured will be paid to the insured by the insurance company.
  • Temporary disability – There will be a total disability but it is temporal in nature. It affects your day-to-day work and you will not be able to attend your job. The insurance company will provide a weekly benefit to compensate for the loss.
  • Death of the insured – If the policyholder dies, the sum assured will be paid to the nominee or beneficiary.
  • Accidental hospitalization – As per the terms and conditions of the policy, the insurance company will cover the hospitalization expense after the accident.
  • Transportation of mortal remains – The insurance company will pay the amount towards the transportation of the mortal remains of the policyholder who died in the accident.
  • Education grant – In some cases, the insurance policy will also cover the education of dependent children.

Insurance premium and coverage

  • The insurance premium is directly proportional to the risk factor
  • If the sum assured is high, the insurance premium will also be high
  • With the new regulation of IRDAI, insurance companies should offer a minimum sum assured of Rs. 15 lakh by paying a premium of Rs. 750 per annum
  • There is no limit on the upper sum assured which can be in multiples of Rs. 1 lakh or Rs. 5 lakhs.
  • The minimum sum assured of Rs. 15 lakh is compulsory for two-wheeler and vehicle insurance plan.
  • The new regulation was passed by IRDAI in tune with the October 2017 judgment by Madras High Court

How to buy a personal accident cover?

As your financial stability will be hit by a fatal accident, you should go for the best two wheeler insurance to covers risks on the road. You should choose the most appropriate policy to fulfill your financial needs.

  • Monthly income – The insurance company offers the coverage as per your earnings. Hence, you will want to disclose your earnings to get maximum protection from the insurance company.
  • Occupation – Your occupation will have an impact on the insurance premium.
  • Worldwide cover – The insurance policy offers the worldwide cover. You should go through the terms and conditions of the policy carefully to understand the limitations and exclusions.

Benefits of online shopping

As you shop for various kinds of products and services online, you can shop for your personal accident cover as well. The vehicle insurance policies offered by various insurance companies can be compared very easily with the online option.

  • Save time – You can save time by using an online channel. You will get insurance quotes from multiple insurance companies. The quotes can be reviewed very easily and it will save time. You will not want to visit the insurance company.
  • Informed choice – You can make an informed choice by choosing the policy online. When you approach an insurance company or an agent, you will get an explanation on products offered by the one insurance company only. You will want to purchase the policy based on the information shared by the agent/insurance company. With the online insurance aggregator, you will come to know the different options available in the market. It is possible to settle for the best insurance policy that delivers maximum benefit with the minimum premium payment.
  • Insurance calculator – The insurance calculator will help figure out the cost of an insurance policy under various heads. The insurance premium will be different for the owner-driver and passengers. You can opt for the number of passengers and as per the number of passengers, you will pay a proportionate insurance premium.

Long-term third party insurance policy

The Long-term third-party insurance policy will help you in cutting down the cost of the insurance premium.

You will not want to renew the insurance policy on annual basis. If you buy a policy for 3 years, the insurance premium will be the same for all three years. On the other hand, the insurance premium will increase every year and you will pay a higher premium when you renew the policy on annual basis.

Mandatory policy It is mandatory to buy a long-term third-party insurance policy for all new vehicles purchased after September 1, 2018.

Tenure The long-term third-party policy tenure is 3 years for car and 5 years for two-wheelers.

For cars for a 3-year policy

Cubic capacity Premium
Less than 1000cc Rs. 5, 286
Above 1000cc and below 1500cc Rs. 9, 534

For two-wheelers for a 5-year policy

Cubic capacity Premium
Less than 75cc Rs. 1, 045
Above 75cc and below 150cc Rs. 3, 285
Above 150cc and below 350cc Rs. 5, 453
Above 350 cc Rs. 13, 034

Types of insurance policies

Third-party policy A third party insurance policy will cover all kinds of risks associated with the third party. As per the current policy structure, the compensation for the third-party will be up to Rs. 2 lakh. When you buy a third-party insurance policy, there will not be personal accident cover.

Package policy With the package policy or comprehensive vehicle insurance policy, the risk associated with the third party as well as vehicle owner will be covered by the policy. It will cover the own damage as well. The policy will cover the personal accident risk for the vehicle owner. The pillion rider in case of two-wheeler can be included by paying an additional premium. The passengers in the car can be included by paying an additional premium.

Mandatory coverage

All the forthcoming two-wheeler insurance policies and car insurance policies should offer a minimum sum assuredof Rs. 15 lakh for the vehicle owner-driver.

If you buy a new two-wheeler or new car after September 1, 2018 you will want to pay a higher insurance premium as the mandatory long-term personal accident cover will be applicable.

The insurance company should offer a minimum insurance cover of Rs. 15 lakh. The insured can go for additional coverage by paying an additional premium.

The insurance companies will come with revised premium rates to cover vehicle owner so that a higher compensation will be applicable to the third party as well as the vehicle owner.

Insurance for a new vehicle

If you bought a new vehicle after September 1, 2018 the vehicle should be covered as per the mandatory regulations of the IRDA. Hence, you should choose the most appropriate insurance policy to cover the vehicle, self, passengers and third-party damages.

Conclusion

There will be irreparable damage due to accidents. When you are traveling on road, you pose various kinds of risks. Even though you manage the best driving skills, there are various factors which are beyond your control. The bad road conditions, traffic violation by third-party and various reasons will affect your security on the road. Hence, you are advised to go for the best personal accident cover which is included in the vehicle insurance. You can buy or renew bike insurance online at the lowest premium after comparing various products of different insurance companies.

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Ajay Deep

Ajay Deep is a young enthusiast who Loves Chandigarh and is always eager to make this beautiful city even more beautiful. A Mechanical Engineer By Chance and Working in an IT MNC by Choice. A Writer, Photographer and a Budding Entrepreneur. A Designer, Developer and Digital Marketing Expert. In brief : A Jack of All Trades and Master of Few :) You may reach Ajay Deep at ajay@chandigarhmetro.com