The Insurance Regulatory and Development Authority of India (IRDAI) raised the minimum amount of the capital sum insured (CSI) amount for vehicle insurance policies to Rs.15 lakh. Earlier, the minimum CSI was Rs.1 lakh for two-wheeler insurance and Rs.2 lakh for cars and commercial vehicle insurance.
The insurance regulator of the country asked all general insurance companies to provide a minimum coverage amount of Rs.15 lakh under the Compulsory Personal Accident (CPA) cover for all classes of vehicles at a premium equal to Rs.750 per year. Previously, the premium payable for the minimum CSI for two-wheelers was Rs.50 and for cars was Rs.100.
Insurance companies currently offer optional covers wherein the insured person can choose an add-on to enhance the basic sum insured by paying an additional premium. However, with the implementation of the new regulation by the IRDAI, owner-drivers will receive extra coverage with the personal accident cover.
The renewed sum insured amount will be applicable to the third-party liability cover as well as the comprehensive cover. In most cases, the personal accident cover offers protection against accidental death as well as disabilities caused by accidents. The compensation provided under the cover depends on the severity of the injury. While the loss of both limbs or loss of both eyes provides a benefit equal to 100% of the sum insured, the loss of one limb or one eye will provide 50% of the sum insured as the benefit.
The circular to increase the CSI came from the IRDAI in response to a ruling by the Madras High Court.
The circular, issued by the regulator on September 20, directed insurance companies to offer covers accordingly. However, the deadline to file the products, as per the File and Use guidelines, is 25 October 2018.