Motor Insurance Policy Wordings – What’s New and What It Means for You

Earlier: One Common Wording for All

For years, motor insurance policy wordings were standard. That means every company used almost the same terms and conditions, especially for Own Damage (OD) covers.

✅ Easy to explain
❌ But limited flexibility – companies couldn’t design unique products

Example:
If a customer asked about “Engine Protect Add-on”, you could only sell it if it was in the standard wording. Not every company could customize it.

Now: Companies Can Create Their Own Wordings

From 1st April 2024, IRDAI has given insurance companies freedom to design their own policy wordings (except Third-Party cover, which is still standardized).

👉 This means insurers can now offer unique features, covers, and add-ons in their own way.

Example:

• Company A may design a wording that says engine damage due to waterlogging is covered.

• Company B may add extra benefits like free roadside assistance.

As a sales agent, this gives you more flexibility to differentiate and match the product to customer needs.

What Hasn’t Changed – Customer Protection Rules

Even though companies have freedom, IRDAI has made sure that:

1. Customer Information Sheet (CIS) must be given.
   → This is a simple 1-2 page summary with key points: coverage, exclusions, claim process, grievance redressal.

   Think of it as a “quick guide” for the customer.

2. Clear and simple language – No confusing legal jargon.
   If there’s doubt, the benefit goes to the customer.

3. Board-approved governance – Every product has to be reviewed by a special Product Committee inside the company.

Why This Matters to You as an Agent

• You’ll have more variety of products to sell.

• Explaining differences between company wordings will become very important.

• Customers may compare policies more closely – so your role in guiding them becomes bigger.

Example: Explaining to a Customer

Customer: “Why should I buy this company’s private car insurance?”
You:

• “Sir, earlier all companies had almost the same policy. Now, this company has designed its own wording with better protection. For example, they cover engine damage due to waterlogging, which many others don’t.”

• “You’ll also get a simple Customer Information Sheet that clearly tells you what’s covered and what’s not.”

This kind of clear explanation will help you build trust and close sales faster.

Key Takeaway

• Old system: Same wording for everyone → Limited flexibility.

• New system: Each company can design its own → More options, more responsibility for agents to explain.

• Your advantage: You can now guide customers better and sell policies that truly fit their needs.

👉 As an Agent, make sure you read the Customer Information Sheet and policy wordings of the companies you sell. This will help you confidently answer customer questions and grow your sales.