What Is IRDAI And How Does It Help Buyers Of Motor Insurance

All the good things in life come with an equal amount of risks. This same adage can be applied to the risks that arise along with the benefits of using motor vehicles. Thus, it is important to take certain precautionary measures to ensure that everything is smooth and that the risk factor posed due to driving is reduced and nullified.

Purchasing a good motor insurance policy is the best form of precautionary measure to reduce this risk factor. Therefore, there are a number of companies in India that provide insurance policies to cater to the needs of the people. However, let’s face it; the sole reason why insurance companies are providing policies is to make money out of it.

And this profit comes at the expense of people. Therefore, there has to be a regulatory body to oversee that the consumers are getting good protection and the insurance companies are making great profits as well. In here, IRDAI comes into the picture; this is the regulatory body that oversees the functioning of the insurance companies in India.

IRDAI stands for "Insurance Regulatory and Development Authority of India" and all the insurance companies function under the united umbrella of this authority.

There are a number of ways through which IRDAI helps people; a few of them are here as follows:

• Price hikes:

Every year, the amount of premium for third party insurance increases. If this price hike was left under the authority of insurance companies, the increase in the premium amount might be way higher than needed. Thus, IRDAI sets the premium for third party insurance and the companies have to follow that amount.

This insurance amount is calculated by the IRDAI to ensure that no motor rider is paying more than needed- so that every person can afford an insurance policy. However, if you want to purchase a comprehensive policy and other add-ons for extra safety then you will have to pay according to the company’s set criteria.

Thus, the amount of money for own-damage cover and add-ons vary from one insurance company to another whereas the price for a third-party cover remains the same.

• Public safety:

Indian roads cater to millions of vehicle drivers on a daily basis and this number keeps on increasing with each passing year. Thus, there has to be a regulatory body which will ensure that the required public safety is met- so that no person ends up on the shorter end of the stick.

Therefore, to reduce the chances of accidents, IRDAI introduces suitable policies from time-to-time. In the recent past, there have been two new mandates introduced by the IRDAI: Long-term third-party cover and an increase in the amount of personal accident cover.

The first mandate i.e. the long-term third-party mandate states that every new motorbike and cars need to have minimum third party insurance for 5 and 3 years respectively.

The other mandate has increased the personal accident cover from 2 lakhs to 15 lakhs. Thus, even if you have to shell out a little extra money from your pockets, it’s worth it for the added protection that you will be getting.