Renewing your motor insurance? Here are some new rules you must know

A PUC certificate is now mandatory while buying or renewing motor insurance, and multi-year third-party insurance policies have been scrapped.

Renewing your motor insurance Here are some new rules you must know

As the pandemic rages on claiming more victims the world over, the Indian government is grappling with the situation to try and put in place a mechanism for a cleaner environment. The IRDAI has implemented two new rules to make life easier for motorists. Read on to understand the new rules applicable for motor insurance renewal in India. 

1. PUC (Pollution Under Control) certificate to be mandatory

Coming to the rescue of our cities which are currently gasping for air – and with the hope of improving the environment – a Pollution Under Control certificate is mandatory for vehicle owners to get motor insurance in India. With the country expecting a motor industry boom in the near future and simultaneously heading towards the goal of low carbon emissions by 2030, this effort needs our wholehearted support.

A PUC certificate ensures that the vehicle’s emission levels are within the acceptable limits specified by the government, and it is the responsibility of the vehicle owner to maintain the vehicle’s engine to meet these norms. While a brand-new car driven straight out of the showroom does not require a PUC certificate for the first year, it is mandatory for all vehicles that are a year old and above.

The government has made a PUC certificate compulsory but at the same time it has stated that no motor insurance provider can deny service to anyone with valid insurance but with a failed PUC. Henceforth, at the time of motor insurance renewal, the insurer will first check if the vehicle has a valid PUC certificate.

Related: 8 Factors to review before renewing your motor insurance policy 

2. Third-party motor insurance to be valid for only 1 year

This rule helps in reducing the on-road value of vehicles by scrapping the earlier option of multiple-year third-party motor insurance. Instead, from now on, third-party motor insurance will be renewable every year. This should result in reduced prices for vehicles and comes as a boon to vehicle owners as they can now search for an insurance provider that offers the best rates or service and switch accordingly.

The government had implemented a new rule in September 2018. It stated that a motor insurance policy needs to have the vehicle owner pay up the third-party portion of three years’ premium upfront, covering third-party liability, thereby increasing the cost outflow in the first year. This resulted in the on-road cost of vehicles going up, and the car owner was willy-nilly tied to a motor insurance policy for three years.

On the part of the insurance providers, it was difficult to decide on premium values for three years. Further, the number of cases involving accident victims were increasing manifold at the courts as car owners who did not have third-party motor insurance intentionally dragged cases, making the victims suffer. The fact that motor insurance companies were forcing a three-year service payment upfront while they enjoyed the interest without having to reimburse for services in the first year made this proposition difficult to digest. Car owners were made to bear the cost even as insurance companies merrily took advance payment. 

This practice has now been discontinued and a new rule has been put in place, where a car owner has to pay insurance on an annual basis for third-party motor insurance. By modifying the rules and implementing market-friendly, customer-oriented changes, the insurance sector is gradually streamlining itself to the requirements of the times. 

Related: How to save money while renewing motor insurance

Next, let’s look at the documents required while buying motor insurance for cars older than a year.

Documents required for purchasing motor insurance in 2020

The following seven documents need to be presented when purchasing a motor insurance policy:

1. Proof of identity (any one of the following):

  • Passport
  • Driving licence
  • Aadhaar
  • PAN card
  • Government-issued photo ID

2. Proof of address (any one of the following):

  • Passport
  • Driving licence
  • Bank or post office passbook
  • Government-issued address proof

3. Recent passport-size photograph

4. Driving licence

5. Registration certificate of the vehicle

6. Valid PUC certificate (for vehicles older than one year)

7. Current insurance policy

Related: How has the motor insurance industry responded to the lockdown?

All the above-mentioned documents are to be provided by the vehicle owner at the time of applying for a motor insurance policy. If any documents are missing, the agent or the insurance company would get in touch with the vehicle owner to retrieve them. Only after all the documents are received and vetted would the policy be generated. 10 Easy tips to reduce your motor insurance premium




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