As we inch closer to August, we wish to require a flash to remind you that vehicles will get cheaper starting next month. Why? Well, because the Insurance Regulatory and Development Authority of India (IRDAI) issued a replacement order in June wherein insurance companies were ordered to prevent selling long-term vehicle insurance package policies to new vehicle owners. The new rule, which comes into effect from 1 August, 2020, will effectively reduce the on-road price of latest cars and two-wheelers.
Okay, now we’ll do a bit little bit of explaining. Long-term comprehensive policies for cars are offered for 3 years while that for two-wheelers are offered for five years. As a package. So, come 1 August, these policy packages with long durations are done away with. And since new vehicle buyers won’t be required to buy three or five years of insurance at one go, the worth of recent vehicles are going to be reduced as a result.
So, exactly what reasonablyinsurance or two-wheeler insurance people will need to buy? Well, new vehicle owners will must compulsorily buy third-party motor insurance albeit for extended terms. While buying a car, one will need to buy a third-party automobile insurance policy with a duration of three years. Whereas, if you’rediscoveringa brand new two-wheeler, you’ll be required to get a third-party two-wheeler insurance with a duration of 5 years.
But what about insuring your own vehicle for damages? For that, you’ll be able to either buy a bundle policy, i.e. one that features both third-party insurance furthermore as own-damage or just buy a standalone own-damage vehicle contract.