IRDAI Allows Unbundling of Personal Accident Cover and What It Means for You

There is good news for all the vehicles owners! The IRDAI has now allowed the unbundling of the compulsory personal accident cover from third party insurance. You might be asking how this benefits you, right? To answer this question we’d have to go all the way back to October of 2018, when the IRDAI passed a new mandate increasing compulsory personal accident cover from rupees 1 lakh to 15 lakh. This thereby increased the CPA premium amount from Rs. 100 to Rs. 750, increasing the upfront cost of your car.

The problems of the old mandate

To understand how the new mandate on unbundling of CPA from third party car insurance will benefit you, we first need to understand the problems of the old mandate. Earlier, people who already had standalone Personal Accident Cover had to purchase it again when they purchased a new car. This was also a problem for people who purchased a two-wheeler or car after October 2018 and planned on buying a new car or bike later on – they would have to buy CPA of Rs. 15 lakhs again.

How the new mandate has improved the situation.

Now people who are purchasing a second car or the ones who already have a compulsory personal accident cover of 15 lakh don’t have to purchase a new one. You just need to have one Personal Accident Cover of Rs. 15 lakh – it will be applicable on whichever vehicle you drive/ride. In simple terms, you now need to have a CPA of 15 lakhs, unlike before where you needed to compulsorily buy it every time you bought a new car or bike.

Further, IRDAI also allows you to choose between single-year and multi-year personal accident policy with your third party car insurance. This is additional good news considering that the IRDAI also mandated long term third party (3-year plans) insurance on the purchase of a new car. As per the old bundled policy, you’d have to take three year of CPA cover upfront as well, something you can now avoid.

Why CPA is important:

Many are wondering why CPA is even important in car insurance and how the increased cover amount will benefit them. Well, with the increasing number of vehicles on Indian roads, the chances of an accident have greatly increased. It’s something you don’t want to think about, but in the unfortunate event of an accident that leaves you & your family financial crippled, your CPA will provide much needed financial cushion. It will ensure any medical costs are taken care of and all your monthly financial obligations will be covered, even if you lose your source of income.

We hope this has given you a better understanding of CPA and the new mandate that allows the unbundling of CPA from third party car insurance. If you have any further doubts regarding this topic, feel free to get in touch with an insurance provider – they will be more than happy to answer any of your queries.

Good luck and all the best, drive safe!