Acting on the directives of the  Madras High Court, the insurance regulator IRDAI on Thursday has raised the limit of sum assured(SA) of  a Compulsory Personal Accident(CPA) Cover to Rs15 lakhs with immediate effect.

Currently, the capital sum insured (CSI) under this section for two wheelers and private cars/commercial vehicles is Rs 1lakh  and Rs2 lakh respectively.

A Compulsory Personal Accident Cover is a part of a motor third party policy and a customer, who was earlier paying Rs 50 (for 2 wheelers ) and Rs 100 (for 4 wheelers) for availing the cover, has now to pay 750 as a part of motor TP policy to avail a cover of Rs 15 lakh.  

General Regulation ('GR')-36 of lndia Motor Tariff (lMT'), 2OO2 mandates general insurance companies carrying on motor insurance business to provide CPA cover for owner-driver under both lability only and package policies. 

All general insurers carrying on motor insurance business has to provide CPA cover for owner-driver under liability only, under Section lll of Package Policies to all classes of vehicles and bundled covers wherever applicable, said IRDAI.


A higher CSI can  be provided over and above Rs15 lakh through optional covers on payment of additional premium at the option of the insured, said the IRDA.


“ln view of the above changes, the current Add on covers offering enhanced CPA Cover for Owner-Driver under Section lll of Package Policies and Bundled Covers up to CSI of Rs.15 lakh  stand withdrawn. However, insurers willing to offer CSI over and above Rs15 lakh  may revise/file add on cover. lt is suggested the higher CSI in such Add on cover may be in multiples of Rs. 1 lakh or Rs 5  lakh,'' said IRDAI.


As regards premium payable for CPA cover under long term motor policies, insurers may price them in line with their current approach for pricing.If the IRDAI findS the pricing approach in variance from their general pricing philosophy/approach and not in line with actuarial principles, suitable direction may be issued by it  .


Earlier while giving verdict while disposing a  MACT(Motor Accident Claims Tribunal)  case in Oct 2017, the Madras High Court had asked the IRDAI to enhance the CPA  cover from the existing Rs 1 lakh to at least not less than Rs.15 lakh so that the amount of will add to  some succor or solace to the victims of road accidents, who are the owner of the vehicle, who may incidentally sustain bodily injury or death.


Further, it had asked IRDAI to provide an option to the insured owner of the vehicle to pay higher premium amount to get enhanced over and above Rs15 lakh- in case the owner of vehicle so desires to such enhanced compensation in the event of any untoward motor accident which may result in bodily injury or death'

Referring to the existing  IRDA note in the policy, the judges-Justices R. Subbiah and A.D. Jagdish Chandira-had said that the policy to compensate vehicle owners by virtue of the personal accident cover was introduced 15 years ago. In 2002, Rs one lakh envisaged under it might have been enough to meet medical expenses of the injured owner to a certain extent.


However, 15 years had lapsed and medical treatment costs had sky-rocketed, the judges said and directed IRDA to enhance the compulsory personal accident cover from the existing Rs one lakh to at least not less than Rs 15lakh, the judges had said.