The latest IRDAI rules update includes mandatory long-term third-party cover for new cars, standard deductibles, uniform NCB rules, and faster claim timelines. These regulations aim to provide better consumer protection, faster claims processing, transparent pricing, greater digital convenience, and reduced fraud.
If you are a car owner and want to buy car insurance online, then you need to understand these regulations properly. This is because it will help you get the most out of your policy and avoid any legal violations.
Gold Rate
May 30- 2026 - Time 10.30Hrs
IRDAI Rules for Car Insurance in 2026
If you are wondering, ‘What is the new IRDAI guideline for car insurance in 2026?’, below is a list of 10 regulations that you must keep in mind:
1. Mandatory 3-Year Third-Party Insurance for New Cars
All private cars must have a minimum 3-year third-party insurance policy at the time of purchase. This policy has been put in place to protect the owner against legal liabilities if they injure or damage someone else’s property. At the end of the 3-year term, the owner needs to make a car insurance renewal to comply with the Motor Vehicles Act 1988.
2. Standalone Own Damage (OD) Cover Allowed
Car owners can now buy a separate, standalone own-damage cover. This will be independent of the third-party insurance and allow the owner to have flexibility. Comparing different plans every year will also allow the owner to include or exclude coverage that they need in their policy. Plus, the owners can also switch insurance for better pricing.
3. Standard Deductibles Introduced
The IRDAI has standardised deductibles for car insurance claims. The deductible amount for cars up to 1500 cc is ₹1,000, and for cars above 1500 cc is ₹2,000. This change has been brought to reduce confusion between insurance and policyholders. This means you have to pay a fixed amount per engine of your car at the time of a claim, and the rest will be paid by the insurance company as per the policy terms.
4. Uniform No Claim Bonus (NCB) Structure
The no-claim bonus structure has also been standardised by the IRDAI. All of the insurance now needs to follow a set structure, which is as follows:
| Number of Claim-Free Years | % of Discount on Premium |
| 1 year | 20% |
| 2 years | 25% |
| 3 years | 35% |
| 4 years | 45% |
| 5 years | 50% |
This structure tries to promote more transparent car insurance policy renewals.
5. Faster Claim Settlement Timelines
The IRDAI has also made claim settlement timelines much clearer and stricter. The table below presents the set time limits for different stages of claim settlements:
| Activity | Time Limit |
| Surveyor appointment | 24 to 72 hours |
| Survey completion | 48 hours |
| Final survey report | Within 15 days |
| Claim settlement | Within 30 days |
The goal is to make the process much faster and reduce the delays in case of total loss or accident claims.
6. RC Cancellation Mandatory in Total Loss/Theft Claims
The cancellation of the RC needs to be done mandatorily upon theft of a car or if it is under ‘Total Loss’. This has been done to prevent the fraudulent use of stolen or damaged vehicles. On top of this, it also ensures proper closure of a claim. Moreover, if the total repair cost of a car exceeds 75% of its IDV, the vehicle is to be declared a ‘Total Loss’.
7. Usage-Based Insurance (PAYD) Encouraged
The IRDAI now officially supports usage-based insurance models. Some common examples of this model include pay-as-you-drive (PAYD) and pay-how-you-drive. This means that your insurance under this model will not depend on your driving behaviour, usage patterns, or driving distance. The advantages of this are low mileage and safe drivers paying less.
8. Passenger Cover Recommendations Strengthened
IRDAI has now also recommended a minimum cover of ₹25,000 for each passenger. This has been done to improve financial aid for passengers in case of accidents or other unexpected events. The insurers are required to provide compensation for injuries and deaths to passengers.
9. Digital Insurance & E-Claims Promotion
As the digital age grows, the IRDAI also strongly promotes the adoption of digital insurance. Promotion of digital insurance ensures that people go for more online renewals and paperless claim filing. This promotion will not only improve the processing time of claims but also reduce paperwork and bring in better transparency.
10. Improved Grievance Redressal Rules
Insurance now needs to respond faster to its customers’ complaints. The timelines for grievance redressals have been fixed. An insurance company needs to acknowledge its customers’ complaints within 3 days and provide a resolution within 15 days.
Bottom Line
The latest 2026 IRDAI car insurance rules focus on improving transparency, faster claim settlements, better customer protection, and digital convenience. From mandatory long-term third-party cover to standardised NCB and deductibles, these regulations help car owners stay legally compliant, reduce fraud, and make informed insurance decisions.
