Insurance regulator may give grace period for renewal of third party cover

NEW DELHI/BENGALURU: Amid reports that many vehicle owners have not yet renewed their third party insurance cover due to lockdown, the insurance regulator, IRDA, is working on some relaxation. Sources said it may allow grace period of at least one month for premium payment for renewal of insurance.

The IRDA has already given relief to vehicle owners announcing that the third party motor vehicle premium for next financial year starting Wednesday will be same as that of 2019-20. It will later notify whether the rates would be revised or the same will continue.

TOI has learnt that the IRDA has taken up the issue of giving some grace period with the department of financial services and there could be some announcement in the next two days. “However, those who can make the payment online must do it as soon as possible,” said a source. Sources said about 30% of vehicle owners prefer to take vehicle insurance cover in March, which is normally the busiest time of the year for insurance companies.

“It is true that section 64VB of the Insurance Act does not permit advance coverage or extension of coverage. But there is a clause - during floods, where vehicles off-the-road can get continued coverage. So there are discussion as to whether that rule could be used in the present context to provide relief to subscribers," said two sources, aware of the matter. Meanwhile, truckers associations have also asked for relief from state goods taxes and road taxes, as they incur higher-than-normal expenses and labour shortage with the 21-day lockdown.

"We are also asking the Centre to request states to waive of tax for the next three months and provide relief from tolls. As we have incurred huge loss. Along with the deferred EMI, it would greatly benefit the sector if interest was waived for the three months," said G R Shanmugappa, general secretary, South India Motor Transport Association (SIMTA).

Source: The Times of India