New motor insurance rules December 15: What's changed? 5 things car & bike owners must check before renewal

**Four-Layer Motor Cover From December**

The Insurance Regulatory and Development Authority of India will move private vehicle motor insurance to a four-layer structure from December 15, 2026. Policies will be split into third-party liability, legal liability towards occupants or pillion riders, personal accident cover, and own-damage protection.

Renewals will therefore involve more than premium comparison. Owners will have to assess who travels in the vehicle, whether those passengers are protected, and whether they can absorb repair costs themselves.

**Mandatory And Optional Covers**

Third-party liability stays compulsory. It addresses the owner's legal liability for injury, death or property damage caused to another person. Personal accident cover for the owner-insured also remains mandatory, subject to applicable rules.

The other elements are optional. Legal liability towards occupants or pillion riders, additional personal accident cover for passengers, and own-damage protection can be chosen or declined. Buying mandatory third-party cover does not by itself protect passengers or the vehicle itself.

The occupant liability option covers the owner's legal exposure for death or bodily injury to eligible occupants, including employees travelling in the insured vehicle. It excludes the owner, the insured and their immediate family, including parents, spouse and children. The number of occupants covered cannot exceed registered seating capacity.

**Disclosure And Documentation Duties**

Insurers must disclose premiums for each component separately, issue a Customer Information Sheet, and obtain a Customer Option Form recording the covers selected. These records matter for intermediaries, fleet operators and in-house compliance teams, since they create an auditable trail of what was sold and what the customer chose.

Occupant liability and personal accident cover are distinct. The former shields the owner against legal liability towards eligible passengers; the …