The general insurance council has designed motor insurance policies with three-five year tenures which can be used to help tackle the problem of non-renewal of policies and a large number of vehicles remaining uninsured.

R Chandrasekaran, Secretary-General, General Insurance Council, said the option to buy these policies will be voluntary and will save customers the hassle of renewing policies annually. Chandrasekaran was speaking at the Insure India annual Fintelekt summit. The council is working on the pricing mechanism for such policies, as the premium for third party insurance is fixed by the Insurance Regulatory and Development Authority.

According to Chandrasekaran, discounts on premiums are unlikely to be offered on longer term policies, but the claim payouts may be higher.

Chandrasekaran said the council has sent a proposal to the Ministry for Road Transport and Highways to consider amending the Motor Vehicles Act. He said general insurers have sought a cap on the liability of the third party motor insurance claims, a limit on timeframe to file claim, and a limit on the jurisdiction to file claims in case of an accident. General insurers have suggested a model of third party liability insurance cover with fixed limits similar to the pre-determined liability limits in air and train accidents.

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