Come January 1, customers will not have to purchase separate compulsory personal accident (CPA) cover for each new vehicle they buy, as per notification of insurance regulator IRDAI.

In a circular yesterday, insurance regulator yesterday, IRDAI has said that it has decided to ‘unbundle the personal Compulsory Personal Accident Cover (CPA) and permit the issuance of a stand-alone Compulsory Personal Accident Cover for owner-driver’. It further clarified that if a policyholder chooses to opt for a CPA cover as a part of the Liability Only Policy or the package policy as it exists now, she can continue to do so. In the event a policyholder decides to take a stand-alone CPA policy, the CPA offered as a part of the liability cover will be deleted.

Devendra Rane, Founder and chief technology officer, Coverfox, explained

"This is indeed a welcome move for the customers who have more than one vehicle. Currently, when a customer buys a policy for his car or bike, the Personal Accident (PA) cover comes as a mandatory part of the Third Prty section for that vehicle. If she goes for a policy for her other vehicle, she has to again pay for the mandatory PA cover. Thus, a customer ends up making dual payment for same coverage.”

With unbundling of CPA a customer can now buy a single stand-alone PA policy and the same would cover his PA risks for all the vehicles owned by her. This would save him overall CPA premium in all her subsequent motor policies.

“However, clarity is awaited on how a customer can opt out of CPA from her motor policy when he already has a standalone PA policy,” Rane added.

Animesh Das, Head of Product Strategy, ACKO General Insurance, does the maths, “With the introduction of this option, customers will be able to save the additional Rs. 750 with his vehicle. For example, if a customer has two cars, then he can take a stand-alone PA cover and need not opt for separate CPA for two cars. Previously, customers were supposed to take CPA for both cars. In this case, a customer can save Rs. 750.”

The changes have been affected following feedback from various quarters wherein it has been pointed out that many owner-drivers already have existing general personal accident covers which ought to be taken cognizance of. Also, the fact that owner-drivers may own more than one vehicle needs to be taken into consideration in a more rational manner so that the owner-driver does not have to take different policies for the different vehicles that he or she owns.