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IRDA plans to make third party motor insurance plans valid for 2 yrs

The move is expected to solve the issue of large number of vehicles running without cover

March 26, 2013 4:13 IST | India Infoline News Service
The Insurance Regulatory and Development Authority (IRDA) is considering to make third party motor insurance policies valid for two years. IRDA is working on a draft two-year motor policy.

The move is expected to solve the issue of large number of vehicles running without cover.

At present, the motor insurance policy is valid one-year term.

It is a win for customers, too, as long-term policies could be priced lower, with insurers factoring in the no-claims discount, and also relieve them from the burden of the annual renewal, according to industry experts.

Motor insurance covers one’s own and third party damage to property or life. Vehicle owners have the option of choosing between a standalone (third party) and a comprehensive cover. Though it is mandatory for vehicles to have an insurance cover, it is estimated that nearly 70% of two-wheelers and 35% of four-wheelers are uninsured.

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