IRDAI four-layer motor insurance for cars and two-wheelers from 15 December 2026
From 15 December 2026 private car and two-wheeler policies split into four covers. Only third-party cover is compulsory. Here is what changes for you.
The insurance regulator IRDAI has told general insurers to sell private car and two-wheeler policies in a new four-layer structure from 15 December 2026. The circular was issued on Tuesday, 3 November 2026, and The Hindu BusinessLine reported its contents the same day. We could not read the circular itself on the IRDAI website, so the details below are as reported by The Hindu BusinessLine. The circular follows a Supreme Court order in National Insurance Company Ltd vs Thungala Dhana Laxmi & Others.
The four covers
A motor policy will have four separate sections:
- Third-party liability cover. This stays compulsory.
- Legal liability cover for occupants of the car or the pillion rider on a two-wheeler.
- Personal accident cover.
- Loss of or damage to your own vehicle, called own damage cover.
Covers 2, 3 and 4 become optional. The personal accident cover is optional subject to the existing rules on compulsory personal accident insurance for the owner-driver, so check what applies to you when you buy.
What you will see when you buy
All general insurers must use uniform policy wordings for private vehicles, including new cars and two-wheelers. Each customer must fill in an option form and tick the covers they want, offline or online. The insurer must also give a Customer Information Sheet at the point of sale. It must show the cover you get and the premium charged for each section, so you can see what each part costs.
Insurers can still set their own prices for own damage cover. IRDAI has also told insurers to make these policies available on Bima Sugam from the same date, 15 December 2026.
If you already have a policy
Existing policyholders can add the legal liability cover for occupants or pillion riders during the policy term by paying an additional premium. The report does not say that running policies change on 15 December, so your current policy continues until it is renewed.
What to do
At your next renewal or purchase, read the Customer Information Sheet and compare the premium line by line. Do not drop a cover only to lower the premium. Own damage cover pays for repairs to your own vehicle, and personal accident cover pays for injury or death of the insured person, so think about what you would have to pay yourself without them. Third-party cover must remain.
Sources: The Hindu BusinessLine: IRDAI mandates four-layer motor insurance structure from December 15, IRDAI: Circulars.
Rules, rates and limits change. Check the official source linked above before you rely on a figure here. Posts never contain referral or affiliate links from the writer.
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