This will cover buses, vans and other commercial transport vehicles and will be implemented through the upcoming amendment to theMotor Vehicles Act.
At present, only the driver of the opposite party is covered by third party insurance policies, which are very popular in India because of their lower cost.
Out of the 19 cr (190 mln) registered vehicles in India, 8.26 cr have only third party insurance coverage. Under this type of coverage, the insurance company is only liable for damage caused to others and not to the buyer of the policy.
PREMIUM TO GO UP
The clarification came in the wake of a move to increase third-party premiums on vehicles.
All vehicles in India must have at least third-party insurance, and the rates for such policies are revised every year by the insurance regulator keeping in mind the actual outgo of money in the previous year in the form of claims.
The Insurance Regulatory and Development Authority of India has proposed an increase of 50% in premiums for most cars and motorcycles from next month.
For mid-sized cars of up to 1,500 cc, insurance premium will jump to 3,355 plus tax, while for large cars, it will rise to Rs 9,246 plus tax.
The draft rates for the next year are currently put up on IRDA’s website for feedback.