Four Layer Motor Insurance Policy From 15 December 2026
An IRDAI circular dated 2 November 2026 splits private car and two-wheeler insurance into four separately priced covers, for all policies issued from 15 December 2026. You will tick the covers you want and see each price.
What changed
When: 15 December 2026, for all policies issued from that date (IRDAI circular of 2 November 2026).
| Before | Now |
|---|---|
| Policy structure | |
| One bundled policy | Four sections, each with its own premium |
| Third party liability (Section I) | |
| Compulsory | Mandatory, own premium shown |
| Passenger or pillion liability (Section II) | |
| Bundled or unclear | Optional, own premium shown |
| Personal accident cover (Section III) | |
| Bundled | Owner cover mandatory, cover for others optional |
| Own damage (Section IV) | |
| Offered as a package | Optional, insurers still set the price |
| At purchase | |
| Standard proposal | Option form and Customer Information Sheet |
What is the four layer motor insurance policy?
IRDAI circular IRDAI/NL/CIR/MISC/145/11/2026, dated 2 November 2026, is addressed to all general insurers. It applies to private cars and two-wheelers and follows a Supreme Court direction in National Insurance Company Ltd v Thungala Dhana Laxmi (CA No. 14369 of 2025).
The aim is clarity: you should know which covers exist and choose the ones you want, instead of getting one bundled policy. IRDAI has issued uniform policy wordings and a customer option form with the circular.
Which four covers are in the new motor policy?
- Section I: third party liability. Mandatory.
- Section II: legal liability to passengers or a pillion rider, including employees. Optional.
- Section III: personal accident cover. Mandatory for the owner. Optional for passengers, a pillion rider or a driver who is not the owner.
- Section IV: loss of or damage to your own vehicle (own damage). Optional.
From when does the new car and bike insurance rule apply?
The circular says the structure and the standard wordings with the option form come into force on 15 December 2026. All policies issued from that date must follow it. The text covers all private vehicles, including new cars and new two-wheelers.
The policy schedule must show the cover and premium for each section. Insurers must give you an option form to tick, online or offline, and a Customer Information Sheet at the point of sale. A filled option form is mandatory for every policy of this kind and forms part of the policy.
Can I add cover in the middle of my policy?
Yes, for Section II. For an existing policy, the circular says legal liability cover for occupants or a pillion rider can be added during the policy term for an extra premium. It starts from the date and time on the endorsement.
You can take it only from the insurer that issued your third party policy, and no existing third party policy has to be cancelled. The circular does not mention adding Sections III or IV mid-term.
What should I check before buying or renewing?
Read each price on the option form before you tick. Skipping own damage lowers the premium but you then pay for repairs to your own vehicle. Insurers may still price own damage cover themselves.
Insurers must also make these policies available on Bima Sugam from the same date. Keep your insurance with your vehicle registration papers and PUC certificate.
Frequently asked questions
What is the four layer motor insurance rule?
IRDAI requires car and two-wheeler policies to show four separate covers with their own premiums, from 15 December 2026.
Which covers are compulsory?
Third party liability and personal accident cover for the owner. Passenger liability and own damage are optional.
Does it apply to my existing car or bike?
It applies to all private car and two-wheeler policies issued from 15 December 2026, including renewals.
Can I add passenger cover mid-policy?
Yes for Section II, through the insurer that issued your third party policy, by paying extra premium.
Gaadi ke insurance mein 15 December se kya badlega?
IRDAI ke 2 November 2026 ke circular ke mutabik premium 4 hisson mein dikhega. Third party aur owner accident cover zaroori hai, baaki aap chun sakte hain.
Short summary in Hinglish
IRDAI ke 2 November 2026 ke circular se car aur bike ka insurance 15 December 2026 se 4 alag covers mein dikhega. Third party aur owner accident cover zaroori hain, baaki aap chun sakte hain. Official circular humne padha hai.
