All insurance companies in India has been asked by the Insurance Regulatory Development Authority of India to design new long-term insurance policies for 2-wheelers and cars. The time period mentioned in the notification was 4 years for cars and 5 years for 2-wheelers. Currently, they are insured on annual basis.
This step will reduce the hassle of renewing the Insurance policy every year. An estimation states that presently only 50% of the vehicles on Indian roads are insured. The step is also expected to increase the percentage along with lesser insurance rates.
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The rates of the policy will be decided by the regulator, and these long-term policies will be filed under the file-and-use procedure. IRDAI in March 2018 reduced the premium for third party insurances, 10% for cars having smaller engines, i.e., below 1000cc now available at a cost of Rs.1,850. For cars with bigger engines falling under 1000-1500cc category now has been set at Rs.2860 while for cars having engines bigger than 1500 cc it is now Rs.7890. Premium rates for 2-wheelers were also reduced.
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Source: Economic Times