Now, customise motor, home insurance policies: Irdai

Pushing for “new, innovative and customised products under the new product regulations”, the insurance regulator, Irdai, has come out with a master circular on general insurance to encourage products tailored to the individual needs of customers. General insurance products primarily include motor, home and travel plans.

In motor insurance, ‘pay as you drive’ and ‘pay as you go’ options will be offered as a first choice, aligning premiums with actual usage. In home insurance, homeowners will be able to choose add-on covers such as flood, cyclone, earthquake, landslide, rockslide, terrorism, or opt-out from comprehensive fire and allied peril policies, providing more tailored coverage.

“We fully support Irdai's circular emphasising the availability of a wider range of products and customisation options for our customers. These measures align with our commitment to offering tailored, comprehensive coverage that meets our customers' unique needs while maintaining high standards of integrity and efficiency in our operations,” says Rakesh Jain, CEO, Reliance General Insurance.

Adds Shanai Ghosh, MD and CEO, Zuno General Insurance: “Initiatives like ‘pay as you drive’ and eliminating the contribution clause for multiple policies underscore a commitment to fairness and innovation. These guidelines resonate with our brand ethos, especially as usage-based insurance with both ‘pay as you drive’ and ‘pay how you drive’ is an area of focus for us. Undoubtedly, these measures will contribute to a more customer-centric and efficient insurance landscape.”

In addition to customised products, the insurers will also need to have a “base product defining the necessary minimum coverage in each line of business” to be put up on the website, making it easy for customers to compare it with other alternatives.

This is in keeping with the shift from rule-based to principle-based regulatory framework, which focuses on flexibility for customers and facilitates ease of doing business and pushes innovation.

However, the insurer cannot “withdraw or decline to offer any erstwhile tariff products which have been in existence”, stated the circular.

It also states that no claim shall be rejected for want of documents. “The customer may be asked to submit only those documents that are directly related to claim settlement,” states the circular.

The master circular, repealing all earlier circulars and guidelines, suggests providing wider choice and options to customers and was released on 11 June 2024. This comes shortly on the heels of a master circular on health insurance released on 29 May.