The general insurance industry has welcomed the introduction of long-term third party motor insurance policy for two-wheelers by sectoral regulator Irda.
The regulator yesterday allowed general insurance companies to provide third party motor cover for two-wheelers for a period of three years instead of the current practice of annual renewal.
"There are a good number of vehicles that are plying without having any insurance coverage. So, this progressive move by Irda will help us bring more and more such two-wheelers under insurance cover," ICICI Lombard MD and Chief Executive Bhargav Dasgupta told PTI today.
Getting the two-wheeler insured at the time of purchase is mandatory. The problem arises from second year onwards when owners often fail or forget to renew insurance cover of their vehicles, according to industry people.
"It (the new norm) will bring a lot of people under the fold of insurance who typically forget to renew their annual insurance policies," Reliance General Insurance CEO Rakesh Jain said.
"We've observed that most of the vehicles don't get insured from second year onwards. This new cover will help the industry to a great extent. Customers will inculcate the habit of renewing insurance cover of their vehicles," Royal Sundaram General Insurance Managing Director Ajay Bimbhet said.
Royal Sundaram said the new policy will benefit all parties concerned.
"Recurring cost of a vehicle could reduce and lead to higher sale of vehicles as well as upgradation. This will be a big positive for vehicle manufacturers too," the private company said.
It will lead to lower premiums as administrative cost savings of insurers can be passed on to customers. This will ensure smooth claim settlement as customers will have longer relationship with insurance companies, Royal Sundaram said.
