Since the 20th of September, 2018 all motor insurance companies have been directed to raise the sum assured on personal accident cover from 2 lakhs to 15 lakhs on car insurance. This will be applicable to both third party and comprehensive insurance plans. This is a step taken by the IRDAI after the Honorable Madras High Court’s order to enhance the compulsory personal accident cover applicable on motor insurance policies.
What is Personal Accident Cover?
It is a mandatory component of any motor insurance policy that offers compensation to the Owner-Driver in case of death or permanent disability in an accident. The accident in concern could occur while driving or mounting into/dismounting from the vehicle. Of course, the owner-driver should have a valid driving license at the time. The amount of compensation has been predefined based on the extent of injuries and is stated below for your understanding:
– 100% compensation in case of death
– 100% compensation in case of loss of both limbs/eyes or the loss of one limb and eyesight in one eye.
-50% in case of loss of one limb or eyesight in one eye.
-100% if the accident causes total permanent disability.
Why is this beneficial for car insurance buyers?
Some might wonder what the benefit of such a move is, especially if it calls for an increased premium amount. However, with the number of accidents on Indian roads, this move gives some sort of solace to bereaved family members & decent compensation in case of permanent disability. As far as the cost is concerned, you must know that the previous personal accident cover of 2 lakhs cost you Rs. 100 plus GST. However, the new cover of 15 lakh is being made available to you at just Rs. 750 plus GST – for the price, this increased sum assured of compulsory accident cover is an amazing deal.
Let’s take an example to better understand the benefits of this newly introduced PAC. Say a family has monthly obligations of Rs. 25,000; in case of an unfortunate event, the new PAC will help the family cover these monthly expenditures for 60 months. This benefit is being made available to drivers at a minimal cost of Rs. 750 + GST. If you are buying comprehensive car insurance,the increased premium is a negligible percentage increase in the premium amount. Moreover, this added PAC will be extremely helpful if the owner-driver is the sole breadwinner of the family.
Therefore, if you are buying car insurance, ensure you get the increased personal accident cover with the policy. Remember to inquire about before you make the purchase final. If you have doubts about the same, you should pick up the phone and speak to your insurer today. It is of utmost importance that you have a complete understanding of PAC element before signing along the dotted line of the application form. We hope this article has been helpful. Good luck and all the best, drive safe!