Executive Summary:
This document addresses compulsory personal accident (CPA) insurance for owner-drivers in India, as mandated by the IRDAI following a Madras High Court judgment. It clarifies the objectives, regulations, and compliance aspects of CPA cover. The policy ensures financial protection to owner-drivers in case of death or permanent disability due to accidents, with a minimum sum insured of Rs 15 lakhs since January 1, 2019.
Key Points / Main Content:
* **Objective of CPA Insurance:**
* Provides financial protection to owner-drivers in the event of death or permanent disability due to accidents while driving, mounting, dismounting, or traveling as a co-driver.
* The owner must hold a valid driving license to be considered an owner-driver.
* Available with General Insurance companies for motor vehicles, including private cars, two-wheelers, and commercial vehicles.
* **Regulatory Mandates and Sum Insured:**
* Initially mandated under Indian Motor Tariff (IMT) 2002 with sums insured of Rs 1 lakh for two-wheelers and Rs 2 lakhs for other vehicles.
* Following the Madras High Court judgment, IRDAI issued circulars mandating a minimum sum insured of Rs 15 lakhs for a one-year standalone CPA cover, effective December 11, 2018.
* **Standalone CPA Policy Details:**
* Coverage extends to all vehicles owned by the owner-driver under a single policy.
* Opt-out options are available under specific conditions (sufficient existing coverage or coverage under other vehicle insurance policies).
* Insurance companies were permitted to issue standalone CPA covers from January 1, 2019.
* Policyholders can still opt for CPA cover as part of Liability only or Package policies.
* **Data on CPA Policies and Vehicle Registration:**
* Data from the Insurance Information Bureau shows the number of owner-driver PA policies issued in the last 5 financial years (2019-20 to 2023-24).
* Data from the Ministry of Road Transport & Highways shows the total number of vehicles registered in the last 5 calendar years (2020 to 2024), and partial data for 2025.
Impact Analysis:
* **Owner-Drivers:**
* Impact: Benefit from financial protection in case of accidents leading to death or disability.
* Action Required: Ensure they have a CPA cover of at least Rs 15 lakhs, either standalone or as part of a comprehensive policy, and review existing coverage to determine if opting out is suitable.
* **General Insurance Companies:**
* Impact: Required to offer standalone CPA cover with a minimum sum insured of Rs 15 lakhs.
* Action Required: Comply with IRDAI circulars, provide standalone CPA policies, and ensure customers are informed about the option to opt-out under specified conditions.
* **IRDAI:**
* Impact: Responsible for overseeing the implementation and compliance of CPA insurance regulations.
* Action Required: Monitor insurance companies' adherence to the guidelines and collect relevant data on CPA policies issued.
Key Entities Referenced
Insurance Regulatory and Development Authority of India (IRDAI): Regulatory body that regulates and develops the insurance industry in India. They issued circulars on CPA insurance.
Compulsory Personal Accident (CPA): A type of insurance policy that provides financial protection to vehicle owner-drivers in the event of death or permanent disability due to an accident.
SHRI RAJKUMAR CHAHAR: Member of Lok Sabha who raised a question about compulsory personal accident insurance for owner-drivers.
SHRI PANKAJ CHAUDHARY: The Minister of State in the Ministry of Finance who provided the answer to the Lok Sabha question.
Insurance Act, 1938: An act of the Indian parliament relating to the insurance industry in India. The Tariff Advisory Committee (TAC) was formed under Part IIB of this act.
Indian Motor Tariff (IMT) 2002: A document laid down by the Tariff Advisory Committee (TAC) containing rules, terms and conditions for motor insurance in India.
Madras High Court: The High Court of Madras, which issued a judgment on 26th October 2017 that led to IRDAI issuing various circulars on CPA insurance.
Ministry of Road Transport Highways: Source of data for Vehicle Registration numbers in India
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION No. 3652
ANSWERED ON MONDAY, 11 AUGUST, 2025/SRAVANA 20, 1947 (SAKA)
COMPULSORY PERSONAL ACCIDENT INSURANCE FOR OWNER-DRIVERS
3652. SHRI RAJKUMAR CHAHAR:
Will the Minister of FINANCE be pleased to state:
(a) the concept and objective of compulsory personal accident insurance for owner-drivers;
(b) whether it is mandatory under IRDAI regulations and relevant legal provisions;
(c) if so, the data for the last five years on such policies issued along with total registered
motor vehicles, year-wise;
(d) the minimum sum insured and date of last revision; and
(e) whether insurers comply and offer it as bundled or standalone cover and if so, the details
thereof?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) The Compulsory Personal Accident (CPA) for owner-drivers provides financial protection
to vehicle owners-drivers in the event of death or permanent disability due to accident whilst
driving the vehicle (including mounting into/ dismounting from) or traveling in the insured
vehicle as a co-driver. The owner of the insured vehicle who holds a driving license is termed
as owner-driver for this purpose. The CPA cover is available with General insurance
companies for motor vehicles including private cars, two wheelers and commercial vehicles.
(b) to (e): The erstwhile Tariff Advisory Committee (TAC) formed under Part IIB of the
Insurance Act, 1938, laid down Indian Motor Tariff (IMT) 2002 which contained rules, terms
and conditions etc. for transaction of motor insurance in India. The General Regulations 36
of the IMT 2002 mandated for CPA cover for owner-drivers of motor vehicles providing the
sum insured as Rs 1 lakh for Motorized Two Wheelers and Rs 2 lakh for Private Cars and
Commercial vehicles.
Later, in accordance with the judgment dated 26th October 2017 of the Hon'ble Madras High
Court, the Insurance Regulatory and Development Authority of India (IRDAI) has issued
various circulars on CPA insurance, most recent on 11th December 2018, stipulating that all
General Insurers carrying on motor insurance business shall provide standalone CPA cover
for owner-driver for a minimum sum insured of Rs 15 lakhs for policy period of one-year.
Coverage under the stand-alone CPA will extend to all the vehicles owned by the owner-
driver under the same policy.
However, the insured is permitted to opt out on the basis of certain exceptions such as where
they have already covered themselves sufficiently (Rs.15 Lakh or above) in other life or
personal accident insurance policies and/ or having multiple vehicles and already coveredunder insurance of those vehicles, where a vehicle is owned by a company, a partnership
firm or a similar body corporate etc.
W.e.f. 01st January 2019, IRDAI has permitted the insurance companies to issue stand-alone
CPA cover for owner-driver. However, if a policyholder chooses to opt for the CPA cover as
part of the Liability only policy or the Package policy, he/she can continue to do so.
The data for the last five years on such policies issued and total registered motor vehicles
for last five years is enclosed at Annexure.
*******Annexure referred in reply of Lok Sabha Unstarred Question No. 3652 for 11.8.2025
Number of CPA policies issued in the last 5 FYs
Financial Year No. of Owner-Driver PA Policies
2019-20 7,74,98,362
2020-21 6,79,17,152
2021-22 6,80,31,126
2022-23 6,58,64,828
2023-24 7,20,58,557
Source: Insurance Information Bureau
Total count of vehicle registered for the last 5 years
Calendar Year Vehicles registered per year
2020 1,863,3419
2021 1,891,0622
2022 2,157,7909
2023 2,400,8418
2024 2,620,9814
2025 (till 5.8.2025) 1,517,1261
Source: Ministry of Road Transport & Highways