Motor Insurance Revamp: 4 Layers, Your Choice Now

IRDAI is restructuring motor insurance into four distinct layers from December 15. Car and bike owners can now pick and pay for only the covers they actually need, with each premium shown separately and clearly.

Here's what happened: IRDAI has introduced a four-layer motor insurance framework effective December 15, covering third-party liability, own damage, personal accident, and add-ons separately.. Each layer will carry its own transparent premium, so policyholders can see exactly what every component of their motor cover costs.. Vehicle owners can now customise their policy by choosing which layers and add-ons they want, rather than being forced to accept a pre-bundled package..

What you should do: At your next renewal, request an itemised premium breakup across all four layers and compare it against what you paid last year.. Review which add-ons you actually claimed in the past three years — drop any you've never used to reduce your premium.. Check that third-party liability cover is always included regardless of customisation, since driving without it carries a fine of up to ₹2,000 plus possible licence action..

Own-damage cover is optional by law — if your car is over 7 years old and its market value is low, skipping it and paying out-of-pocket for minor repairs can save you ₹3,000–₹6,000 a year.

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