Buying a Car or Bike will be cheaper from August 1, major change in Insurance Rules

HIGHLIGHTS: The rules related to car and two-wheeler insurance are going to change from August 1, 2020. 


According to the instructions of the Insurance Development and Regulatory Authority of India (IRDA), it will not be necessary to take a third party cover for the car for 1 year and 5 years for two wheelers when purchasing a car from 1 August. IRDA has withdrawn the Long Term Packaged Third Party and On-Damage Insurance Policy in June. IRDA said that due to these, the price of vehicles increases, which makes it difficult to carry vehicles.


This rule was introduced in 2018

IRDA reviewed the current long-term package cover in June. It then withdrew the decision of 3 years for new cars and 5 years for two-wheeler, third party and own damage cover from 1 August 2020. IRDA made it mandatory for insurers to purchase a 3-year motor insurance policy for cars from August 2018 and a 5-year motor insurance policy for two-wheelers from September 2018.


What is Motor Third Party Insurance?

Third party means third party. The first party is the vehicle owner, the second driver and in the event of an accident the third party is the victim. The owner and driver of the vehicle are legally obliged to recover damages if an accident occurs during the use of a motor vehicle in a public place and there is loss of life and property to a third party. In such a situation, third party insurance is done by insurance companies to compensate for the economic compensation. The amount of compensation is paid by the insurance company concerned on getting the insurance done.


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What is Own Damage Cover?

In an Own Damage (OD) or Comprehensive Policy, all the cover of third party policy comes under the purview of damage to the insured vehicle. You do not have to face financial loss due to loss in the car.


Source: Web