Insurers to make available standalone 'own damage' motor policy from September 1

Insurance Regulatory and Development Authority of India (Irdai) has asked general insurance companies to make available standalone annual Own Damage (OD) covers for both new and old cars and two-wheelers from September 1. Consequently, the issuance of bundled policies for cars and two-wheelers will not be compulsory from September 1. Further, insurers will have the option to offer package policies, in addition to standalone OD and third-party policies. However, long term standalone OD policy will not be permitted for the present.

Buying OD vehicle insurance is optional. OD covers natural calamities, like earthquakes and floods, and also disasters such as vandalism and riots. Policyholders have the option to renew the Own Damage component of a bundled cover falling due on or after September 1, 2019, with the same insurer or different insurer, on an annual basis.

For issuance of standalone OD annual cover as well as for renewal of the OD component of a bundled cover, insurers will have to ensure that the cover is offered only if a motor third-party (TP) cover is already in existence or is taken simultaneously. Also, the pricing of a stand-alone OD policy should continue to be that being offered for the OD component of a package policy (the same was followed for the OD component of a bundled product as well).