The Insurance Regulatory and Development Authority of India (Irdai) said on Tuesday that it has withdrawn the launch term motor third party insurance package. Let me tell you that the launch term motor third party insurance package was 3 years for four-wheelers and 5 years for two-wheelers. The launch term motor insurance policy will not be there from 1st August 2020. According to Irdai, the distribution of launch term third party policies is challenging as it is heavy on the pockets of most vehicle buyers. Irdai said that in case of launch term third party insurance, there is a high possibility of the forced sale of the policy and linked insurance to the loan and policyholders, thus get an insurance product that does not have flexibility.
Irdai said that the structure of the no-claim bonus between insurance companies is not uniform and may cause dissatisfaction and confusion among policyholders. The insurance regulator also said that executive pricing has been a challenge for insurance companies in the case of launch term on the table cover. Now customers will not be given the option to buy long-term on-the-table. Earlier, Irdai had asked the insurance companies to provide customers with the option to buy a one-year and long-term own table plan. Physical damage, theft, accident, and natural calamity are compensated by the vehicle under the on-the-table cover.
In 2018, the Supreme Court had ordered a valid cover of vehicles plying on Indian roads, ordering that a 3-year launch term policy would be mandatory for two-wheelers for 5 years and four-wheelers. Thereafter, the insurance companies offered launch term policies to the customers.
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