The Insurance Regulatory and Development Authority of India (IRDAI) on 19th May 2022, has advised the insurers to discontinue the advertisements in respect of the services not related to insurance claims as may be provided by motor garages/workshops.
General Insurance Companies enter into service agreements with motor workshops/garages for the purpose of providing motor insurance claim services for repair of accident vehicles.
However IRDAI has noticed that the service agreements in addition to claim services, extend certain assistance services not related to insurance claims such as free pick up and drop of vehicle, body wash, interior cleaning, inspection of vehicle etc.
While the bundling of the above facilities with insurance is left to the motor service providers, the general insurers issuing advertisements on the said services, projecting them as benefits provided within the insurance cover is unacceptable. The main objective of service agreements with motor garages/workshops shall only be providing insurance services for claims of accident vehicles and it cannot arbitrarily expand to include scope of services which are not relevant for insurance claims.
Therefore in view of the above, the insurers are advised;
(a) to discontinue the advertisements in respect of the services not related to insurance claims as may be provided by motor garages/workshops.
(b) to stop displaying discounts with reference or comparison to rates of erstwhile tariff.
(c) to ensure that the discounts and saving in the premium which may be applicable only under extreme or exceptional scenarios shall not be displayed as examples.
