Discounts on Own-Damage Covers Lowered by 20%

General insurance companies have lowered the discount by up to 20% on commercial and private own-damage motor policies, as third-party motor risk moves to declined pool.
Insurance Regulatory and Development Authority (IRDA) recently scrapped third party motor pool and replaced it with declined pool. It will have lower industry contribution for insurance cover at about Rs 1,200 crore against Rs 6,000 crore earlier.
Discounts on motor own-damage have come down after IRDA increased premiums on third party premium rates. This year third party premium has been increased by 10%.
Third-party motor risk, which earlier went to third party motor pool, will now be borne by individual companies and they have to take claims on their book. This will prompt companies to emphasise on better underwriting and management of risk.
Motor insurance policy basically consists of two parts i.e. third-party-liability and own-damage covers. Third party cover is mandatory by law while own-damage cover is optional.