Major Relief for Vehicle Owners

Car and two-wheeler owners are set to get greater flexibility in choosing motor insurance coverage from December 15, 2026. The Insurance Regulatory and Development Authority of India (IRDAI) has introduced a four-layer insurance structure, allowing customers to select optional covers according to their requirements. Third-party liability insurance and personal accident cover for the owner-driver will remain mandatory, while legal liability coverage for passengers and pillion riders can be chosen optionally. Vehicle owners can also purchase own-damage coverage separately to protect their vehicles against damage or loss.

Under the new framework, insurance companies must clearly disclose the premium charged for each individual cover. They must also provide customers with a Customer Option Form and a Customer Information Sheet at the time of purchasing a policy, ensuring transparency about the coverage selected. Existing third-party policyholders can also add legal liability coverage for passengers and pillion riders by paying an additional premium, without cancelling their existing policies. The move aims to help customers make informed insurance decisions and avoid paying for unwanted coverage.