IRDAI Raised the Minimum Personal Accident Cover to Rs.15 Lakhs | RenewBuy

IRDAI Raised the Minimum Personal Accident Cover to Rs.15 Lakhs

Vehicle insurance is one of the largest insurance sectors in India. We have lakhs of vehicle owners who has a motor insurance plan as it is mandatory by law. Keeping these staggering numbers in mind, the Indian general insurance industry constantly upgrades itself, with the IRDAI guiding the way. A recent revision to the personal accident cover is sure to bring about a lot of relief to every driver on the streets of India. As per the recent notification, IRDAI raised the minimum personal accident cover to Rs. 15 lakhs.

The Amendment

So, what is this news that’s causing such a roar? Well, the IRDAI has directed all the general insurance providers in India to raise the minimum personal accident cover for owner-drivers to INR 15,00,000 for a yearly fixed premium of just INR 750. This is a huge jump from the earlier covers of INR 1 lakh and INR 2 lakh respectively for two- wheeler and commercial/private four-wheeler vehicles. All other components of a regular comprehensive motor insurance plan will remain unchanged.

How does a personal accident cover work?

A personal accident cover promises to pay a sum assured to the beneficiaries if the policyholder dies in a road accident. In this case, the vehicle owner or the driver at the wheels when the accident occurs gets the benefit. So, if he or she dies in a road accident, his or her kin get a sum assured. Vehicle owners/drivers previously had a personal accident cover of only INR one or two lakhs. This was quite insufficient. But now, IRDAI raised the minimum personal accident cover to Rs. 15 lakhs, so the policyholders can breathe a sigh of relief.

Why IRDAI Raised the Minimum Personal accident cover to Rs. 15 lakhs?

If you ask, why this increase, then the answer is that the roads in India are far from being safe and traffic violations are rampant. At such times, everyone looks for some security. They wish to return to their family at the end of the day. And even if that becomes an uncertainty, the promise of the large personal accident cover acts as a solid guarantee to protect the loved ones at all times.

So, with the rise in road accidents, a mere coverage of Rs. 2 lakhs for the owner-driver of a four-wheeler wasn’t sufficient to even meet the hospitalization expenses, if any. With the rise in coverage, even though the premium increases from Rs 100 for a coverage of Rs. 2 lakhs to Rs. 750 for a personal accidental coverage of Rs 15 lakhs, it is worth the spend.

Positive Impact On Drivers

Though just announced, the move from the IRDA will surely have a positive impact on the drivers. Previously, higher personal accident covers were available from certain general insurance providers. However, the policyholders had to shell out additional sums of money for their raised covers. This is because the higher covers were only available in the form of riders. This made the cover expensive and out of reach for many people. The IRDAI’s directive therefore is sure to bring in joy to both the two-wheeler as well as four-wheeler owners as they are now guaranteed to stay protected in a more wholesome manner by paying an affordable premium of INR 750 a year.


Premium and Coverage Rise

Vehicle owners might not be too happy with the compulsory rise in premium.




Premium for PAC of Four-wheelers

Rs 100 + GST

Rs 750 + GST

Premium for PAC of Two-wheelers

Rs 50 + GST

Rs 750 + GST

But the rise in coverage is quite beneficial.




Sum insured for PAC of Four-wheelers

Rs 2 Lakh

Rs 15 Lakhs

Sum insured for PAC of Two-wheelers

Rs 1 lakh

Rs 15 Lakhs

But, in the long-run it will create a positive impact on the industry as a whole.

Benefits in the Increased PAC cover

The benefits can be listed as below:

  • Higher personal accident coverage for owner-drivers
  • The personal accidental coverage plan of any motor insurance policy covers death, disability as well as dismemberment due to any road accidents, mounting or dismounting a car.

The claim is payable on the basis of a grid, which looks like:

Accidental Death

100% of the sum insured is paid to the nominee

Loss of two limbs, sight of both eyes, one limb + sight of one eye

100% of the sum insured is paid to the policyholder

Loss of one limb or sight of one eye

50% of the sum insured is paid to the policyholder

Total and permanent disability

100% of the sum insured is paid to the policyholder


The details of the same can be found on the policy wordings of PAC.

Add-on Options

If a vehicle owner feels he or she needs an even higher personal accident cover, he or she can opt for the same in multiples of Rs 1 lakh or Rs 5 lakhs, with a minimum of Rs 15 lakhs coverage, at the time of applying for the motor insurance plan. Mostly all the comprehensive motor insurance policies have provisions for other riders as well, which are add-on covers at an added cost.

Welcomed by the insurance industry

The move to raise the personal accident cover has largely been welcomed by the Indian general insurance industry. The stalwarts in the industry acknowledged that the move was a step in the correct direction and welcomed the change as a positive one.

In Conclusion

This is an interesting and much needed change to have taken place in the motor insurance sector. With a higher personal accident cover in place, vehicle owners/drivers will be able to drive their vehicles with a greater peace of mind. The fixed, affordable costs have also made this a viable reality for a large section of society.

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