General insurers in India can only offer three-year third-party motor insurance for new cars and five-year coverage for new two-wheelers, effective Sept. 1, Asia Insurance Review reported.
After long-term motor third-party insurance is introduced, customers should be able to choose between a package offering motor third-party insurance and own damage insurance spanning three or five years and a package containing three- or five-year third-party coverage and one-year own damage insurance, the Insurance Regulatory and Development Authority of India said in a circular.
A Supreme Court of India order released in July mandated the rule. The court scrapped Aug. 31 general insurers' plea to delay the implementation. The insurers argued that that they needed more time to adjust and that state governments and regional transport offices should be able to oversee the issuance of long-term policies when new vehicles are registered. They also said the industry is focusing on settling claims from the Kerala floods.