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Auto Insurance to cost more with compulsory three year policy

August 30, 2018, 11:48 AM IST by Abhishek Nigam
Auto Insurance to cost more with compulsory three year policy

- The insurance regulator has made it mandatory for companies to offer only three-year policies for new cars

- The new rules will come into effect from Saturday, September 1, 2018

As if increasing car prices weren’t enough, buyers of new cars will have to shell out even more for their new set of wheels. Come September 1, 2018, the insurance regulator has made it mandatory for auto companies to offer only three year policies with new cars. However for small car buyers, specifically below 1000cc, buyers will be able to lock-in long-term policies at cheaper prices and avoid the annual increase in third-party premium that happens every financial year.

The changes have been pushed into effect very quickly even though insurers were hoping to get more time to get their long term products ready. However there was no respite for them with the IRDAI asking the insurers to start selling the policies at rates announced by the regulator. 

The IRDAI circular follows a Supreme Court directive from last month which asked insurers to issue only long-term third-party cover policies for new cars and two-wheelers from September 1 to avoid a situation of having uninsured vehicles on the road.

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