Car Insurance 2025: IRDAI Changes Indians Should Watch

India’s motor cover is being reshaped in 2025, and these updates affect how policies are bought, priced, and serviced. Many buyers now compare car insurance online before renewal, making it vital to understand what has changed and how it could influence day-to-day choices at renewal.

In this article, you will explore the key IRDAI updates shaping motor insurance in 2025, what to check during purchase or renewal, and practical steps to stay compliant and well-protected.

What Has Changed for Motor Policies in 2025

IRDAI’s master circular for general insurance set out clearer rules on claims handling, cancellations, disclosures and product flexibility. The circular also ties recent reforms together after older tariffs and wordings were de-notified, aiming for simpler, more customer-centred practices.

A headline shift is the regulator’s push for usage-based choices. Insurers are expected to offer telematics-driven options such as Pay As You Drive or Pay As You Go at the front of the purchase journey, giving drivers more control over cost relative to usage.

Comprehensive Insurance: What the Updates Mean

For many owners, comprehensive insurance remains the practical route because it combines own-damage with mandatory third-party cover and allows useful add-ons. The 2024 master circular tightened standards around disclosures and documentation, which should make the purchase of comprehensive car insurance more transparent and the claims process more predictable.

If you are switching this year, review how add-ons such as zero depreciation, roadside assistance, return to invoice and consumables are defined in policy wordings issued under the updated framework. A clear reading helps match comprehensive insurance to vehicle age, usage and local risk.

Third Party Car Insurance: Knowing the Minimum

Every vehicle must carry third-party cover. Third party car insurance covers liability for injury, death, or third-party property damage. While it keeps a policy legal, it does not repair your own car. Owners who rely solely on third parties should be aware that the new rules largely affect claims practice and product presentation, not the basic statutory requirements. Consider whether third party car insurance alone suits your risk profile, especially in busy city traffic.

Faster, Fairer Claims: What to Expect

Timelines for processing and settling motor claims have been clarified. The regulator has also emphasised that claims should not be rejected on arbitrary grounds, and that required documents should be collected at the proposal or underwriting stage rather than at the point of claim. This is intended to reduce friction and disputes.

When reviewing an insurer, look beyond marketing claims and check the claim settlement ratio from credible sources such as the annual IRDAI handbook or the latest industry reports. The 2023-24 data and analyses released in 2025 provide useful context on how general insurers are paying claims.

IRDAI has also cautioned insurers against misleading advertisements around claim settlement ratio, reinforcing the need for transparent, verifiable figures in public communication. This is relevant when you shortlist providers during renewal.

Digital Shift: Bima Sugam and Buying Smart

The upcoming Bima Sugam digital marketplace is designed to bring purchasing, servicing and claims onto a unified public-interest platform. Early briefings indicate a phased roll-out during 2025 with onboarding targeted around the year-end, which should eventually simplify discovery and servicing for motor policies. When it is live, it may become a central place to compare and manage car insurance online in a standardised way.

Until the platform is fully operational, continue to compare features, exclusions and service standards on trusted insurer and intermediary websites. Buying car insurance online helps review documents calmly and retain a clear audit trail of disclosures and add-on selections.

How to Renew Confidently in 2025

Here you will explore how to renew confidently in 2025:

• Match Cover to Use: If annual mileage is modest, ask about telematics-linked options such as Pay As You Drive or Pay As You Go. Confirm how driving data is captured and how pricing changes with usage.
• Balance Own-Damage and Liability: Many drivers prefer comprehensive car insurance for wider protection. Confirm IDV, deductibles and any compulsory excess in the schedule issued under the updated framework.
• Validate Service Performance: Check the latest claim settlement ratio and study how quickly cashless repairs are approved across networks in your city.
• Compare Digitally, Read Wordings: Shortlist, then review policy wordings line by line before buying car insurance online. Look for clarity on consumables, depreciation, engine protect and return to invoice.
• Stay Within Timelines: Report accidents promptly, use the insurer’s app or portal, and keep survey and workshop appointments within stipulated windows to avoid delays under the new claim-handling timelines.

Pricing, Deductibles and Documentation

The reforms followed the de-notification of several earlier tariffs and standard wordings, which gives insurers room to innovate while retaining regulatory guardrails. For buyers, this means deductibles, IDV methods and add-on structures may vary more by company. Read schedules carefully, especially for older cars, as depreciation can affect outcomes under comprehensive insurance.

Conclusion

The 2025 landscape is clearer on rights, timelines and digital access. Use credible sources for performance indicators like claim settlement ratio, choose cover that reflects real usage, and read updated wordings before committing. For most daily drivers, comprehensive insurance still offers balanced protection, while carefully comparing car insurance online options can help align features, service, and cost with individual needs.