Driver and Passenger Cover in Car Insurance

Is Driver and Passenger Cover Mandatory in Car Insurance?

In short, the answer is both yes and no. The Insurance Regulatory and Development Authority of India (IRDAI) has made it compulsory for owner-drivers to have a personal accident cover of INR 15 lakhs. However, personal accident cover for passengers is not mandatory.

But, considering the risk of damages and losses that both drivers and passengers are exposed to while travelling by car, investing in driver and passenger cover is highly recommended.

How Does Driver and Passenger Cover Work in a Car Insurance Policy?

Before you buy personal accident cover in car insurance for drivers and passengers, you need to understand how it works. Here’s what you need to know:

Compulsory personal accident cover:

It is a compulsory cover in car insurance, which secures the registered owner-driver of the insured vehicle against accidental permanent disability and death. The coverage under it is only payable to the insured or his/her legal heir.

Paid driver cover:

In exchange for an extra premium, you can get the Paid Driver Cover, which secures the paid driver against accidental disability or death. The compensation under it is only payable to the paid driver (or his/her legal heir) and not the passengers.

Passenger personal accident cover:

The passenger cover in car insurance is an optional cover, usually available as an add-on. It offers financial compensation to the passengers (except the driver) if they suffer accidental permanent disability or death while travelling in your vehicle.

Compensation Limits under Passenger Cover

For the owner-driver, the compulsory personal accident cover is of INR 15 lakhs. However, for the paid driver and passengers, the cover is optional, and the sum insured depends on the policy agreement. Generally, the chart for the scale of compensation is as follows:

• Accidental death – 100% of CSI
• Loss of two limbs or sight in two eyes – 100% of CSI
• Loss of one limb or sight in one eye – 50% of CSI
• Permanent total disability (other than those mentioned above) – 100% of CSI

Note: Here, CSI means the Capital Sum Insured.

Key Benefits of Driver and Passenger Cover

The major benefits of the personal accident cover in car insurance for drivers and passengers are highlighted below:

Legal mandate:

While personal accident cover for passengers is optional, it is compulsory for the owner-driver. Hence, investing in the Compulsory Personal Accident Cover for the owner-driver lets you comply with the law.

Crucial safety net:

Coverage for both driver and passenger is just as important as coverage for third-party liabilities and the car’s own damages. The driver and passenger cover helps add an extra layer of protection against the unexpected.

Financial protection:

Permanent disability and death arising from accidental injuries can leave you and your loved ones financially vulnerable. Thankfully, the compensation paid under this cover helps to effectively reduce this burden.

Peace of mind:

You can drive with a calm and confident mind, knowing you, your co-passengers and your vehicle are protected against the unexpected under this cover.

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Exclusions under Driver and Passenger Cover

Here are some of the general exclusions under driver and passenger cover in car insurance:

• Compensation is not payable if the resulting injury or death is directly or indirectly, partly or entirely traced to self-injury or suicide.
• Compensation is not payable if the resulting injury or death is directly or indirectly, partly or entirely traced to an accident caused as a result of driving under the influence of drugs and/or alcohol.
• Compensation is not payable in case of seating over the legal capacity of the vehicle.

How to File a Claim under Driver and Passenger Cover?

Insurers list specific instructions for filing a claim under the driver and passenger insurance cover on their website or policy wording. Here is a general step-by-step overview of the process:

1. Step 1: First, ensure the safety of yourself and the passengers. Seek medical treatment as necessary.
2. Step 2: Document the accident via photos and videos. If it involves a third party, note their information, such as their name, motor insurance details, etc.
3. Step 3: File a report at the nearest police station and get a copy of the FIR.
4. Step 4: Notify your insurance company about the accident within the stipulated timeframe. An evaluation of the resulting damages will be made by a surveyor.
5. Step 5: Fill out the claim form alongside the details of your insurance policy and the accident. Submit it alongside the prerequisite documents, such as police FIR copy, copy of driving licence, evidence of damages/losses suffered, etc.
6. Step 6: Upon approval of the claim, the affected person will receive their compensation. In case of death, the compensation is paid to the nominee/legal heir.

Summary

Not only the car but its driver and occupants are also at risk of unforeseen damages/losses in the event of an accident. While the law only makes the compulsory personal accident cover under car insurance mandatory for the owner-driver, getting the optional cover for the co-passengers in the vehicle is also widely recommended. Ensure the safety of your car, yourself and your co-passengers with the driver and passenger cover in car insurance.

Frequently Asked Questions (FAQs)