IRDAI 2024 General Insurance Master Circular: What Changes for Motor Policy Servicing, Claims and Surveyor Allocation

The Insurance Regulatory and Development Authority of India (IRDAI) issued its Master Circular on General Insurance Business in 2024, folding scattered guidance into a single reference and repealing thirteen earlier circulars at one stroke (irdai.gov.in). For the roughly 3 out of 4 Indian households that own at least one motor vehicle, the change is not academic: the circular rewrites how a car or two-wheeler policy is sold, serviced, renewed and — most importantly — how a claim is surveyed and paid. This deep dive explains the motor-facing mechanics, then works through the arithmetic of a real premium and a real claim so you can read your own policy schedule with confidence.

The Rule / Product

The 2024 Master Circular sits on top of the statutory base that has governed motor cover for decades. Section 146 of the Motor Vehicles Act 1988 makes third-party liability insurance compulsory for every vehicle used in a public place, and driving without it is an offence punishable under Section 196 of the same Act (indiacode.nic.in). The Master Circular does not touch that mandate; instead it standardises the customer journey layered on top of it — onboarding, policy servicing, renewal, claim settlement and grievance redressal — so that a policyholder in a metro and one in a Tier-3 town read the same rulebook.

The single most consequential motor provision concerns surveyors. Under Section 64UM of the Insurance Act 1938, only a licensed surveyor and loss assessor may assess a motor loss above the threshold value the regulator prescribes (indiacode.nic.in). The 2024 circular requires that surveyor and loss-assessor work be allocated on a random, automated basis without human intervention, through a technology solution built by the General Insurance Council together with the Indian Institute of Insurance Surveyors and Loss Assessors (IIISLA). In plain terms: from 2024 onward, the insurer's claims desk can no longer hand-pick which surveyor inspects your dented bonnet. The allocation is meant to be machine-driven, breaking the cosy relationships that historically let a favoured surveyor shade an assessment in the insurer's direction.

Three structural shifts flow from the circular for motor policyholders:

• One consolidated rulebook. Thirteen prior circulars are repealed, so servicing standards no longer depend on which older instruction an insurer chooses to cite.
• Random surveyor allocation. Loss assessment moves to an automated, no-human-intervention allocation engine run by the General Insurance Council with IIISLA.
• End-to-end journey standards. Onboarding through grievance redressal is covered in a single document, aligning motor with the parallel Protection of Policyholders' Interests framework of 2024.

Why It Matters

For the car owner, the value of a general-insurance policy is only ever realised at the claim counter, and that is exactly where the 2024 circular concentrates. Random surveyor allocation attacks a structural conflict of interest: before 2024, the same insurer that pays the claim also chose the assessor who decides how much it pays. By moving allocation to an automated engine, IRDAI reduces the room for an assessment to be quietly trimmed, which matters because a single unfavourable survey on a Rs 60,000 repair can cost a policyholder Rs 10,000 or more in disallowed depreciation.

The consolidation also closes a loophole. When servicing rules lived across thirteen separate circulars issued over many years, an insurer could lean on whichever version suited its position in a dispute. A single 2024 rulebook removes that ambiguity, and it dovetails with the IRDAI Protection of Policyholders Interests, Operations and Allied Matters Regulations 2024, which hard-codes consumer safeguards across onboarding and claims. The two instruments are meant to be read together.

Grievance redressal is the third pillar. If a motor claim is short-paid or delayed, the escalation ladder now runs through the insurer's grievance officer and then the Insurance Ombudsman. The companion IRDAI 2024 Policyholder Protection Master Circular sets the redressal architecture, including the Rs 5,000-per-day penalty an insurer pays when it fails to honour an Ombudsman award within the stipulated window. Motor policyholders inherit that protection directly.

Worked Numbers

Motor premium is not one number; it is a stack. To see how the circular's fairness rules bite, you have to see the stack. Consider an illustrative private car with a manufacturer-listed price of Rs 8,00,000 that is 2 years old. The starting point is the Insured Declared Value (IDV) — the maximum the insurer will pay on a total loss — which is the listed price reduced by an age-based depreciation percentage. Understanding IDV is the foundation of every motor calculation.

The depreciation grid below follows the long-standing Indian Motor Tariff convention that insurers still apply:

For our 2-year-old car, the 2-to-3-year band applies at 30%, so the IDV is Rs 8,00,000 minus 30%, or Rs 5,60,000. The own-damage (OD) premium is charged as a percentage of that IDV; at an illustrative rate of 2.5% the base OD premium is Rs 14,000. On top of OD sits the No Claim Bonus, a discount earned for every consecutive claim-free year. Learn how NCB accumulates, because it is the single biggest lever a careful driver controls:

Assume our owner has 3 claim-free years and qualifies for a 35% NCB. The premium build-up then looks like this:

Two features of that table are set by regulation, not by the insurer. The third-party premium is notified by IRDAI and does not vary between companies, so shopping around never changes it. The GST at 18% is a statutory levy on the premium. Everything else — the OD rate and the add-ons — is where competition and the car premium calculator earn their keep; a two-wheeler owner should run the parallel two-wheeler premium calculator instead.

Now the claim side, where random surveyor allocation matters most. Suppose the same car suffers Rs 60,000 of accident damage, of which Rs 20,000 is plastic and rubber parts that attract 50% depreciation under a standard policy. A compulsory deductible of Rs 1,000 applies to private cars not exceeding 1500 cc. The payout differs sharply depending on whether a zero-depreciation add-on was bought:

The Rs 10,000 gap is exactly the amount a surveyor's depreciation judgement controls, which is why moving allocation to an automated engine is a genuine consumer win rather than paperwork. To model your own accident scenario, the claim estimator walks through depreciation, deductible and add-ons line by line.

Pitfalls

Even a well-drafted motor policy hides traps in the fine print. The 2024 circular improves process fairness, but it does not rewrite the exclusions you agreed to at purchase. Watch for these six:

• Part depreciation eats your payout. As the worked claim shows, a standard policy can deduct 50% on plastic and rubber parts and up to 40% on metal parts by age, turning a Rs 60,000 repair into a Rs 49,000 cheque. A zero-depreciation add-on closes that gap but typically raises the OD premium; weigh it against the Rs 10,000 exposure.
• Compulsory deductible always applies. The Rs 1,000 excess on cars up to 1500 cc (and Rs 2,000 above 1500 cc) is deducted from every own-damage claim and cannot be waived, so very small dents are rarely worth claiming.
• One claim can wipe out a 50% NCB. The No Claim Bonus attaches to the policyholder's record, not the car; a single Rs 5,000 claim can reset a hard-earned 50% discount to zero and cost far more than the claim across future renewals. Weigh small claims against the NCB you will forfeit.
• Engine damage from water is not automatic cover. Standard own-damage does not pay for hydrostatic lock — engine seizure after water ingress in a flood — unless an engine-protection add-on is in force. This is the most common monsoon-season rejection.
• Consumables are excluded by default. Engine oil, coolant, nuts and washers replaced during a repair are not paid under a base policy without a consumables add-on, quietly shrinking the settlement.
• Under-declaring IDV backfires. Some owners set a low IDV to shave premium, but on a total loss or theft the insurer pays only that reduced IDV. On our example car, cutting the IDV from Rs 5,60,000 to Rs 5,00,000 saves a little premium but forfeits Rs 60,000 at the worst possible moment.

FAQ

Does the 2024 Master Circular apply to my existing car policy?

The circular governs how insurers conduct general insurance business — onboarding, servicing, claims and grievance handling — so its servicing and claim-process standards reach every motor policy an insurer administers, not only new ones. It repeals thirteen earlier circulars, meaning your insurer can no longer fall back on the older, fragmented rules when servicing your policy.

What exactly changes about surveyors?

For loss assessment that requires a licensed surveyor under Section 64UM of the Insurance Act 1938, the insurer can no longer choose the assessor. The 2024 circular mandates random, automated allocation without human intervention, run through a technology platform built by the General Insurance Council with IIISLA. The aim is to remove the conflict of interest in letting the paying insurer pick the person who values the loss.

Is third-party insurance still compulsory, and what does it cost?

Yes. Section 146 of the Motor Vehicles Act 1988 makes third-party cover mandatory for any vehicle in a public place, and the premium is notified by IRDAI, so it does not vary between insurers. Only the own-damage portion and add-ons are open to competition; in the worked example the notified third-party component was an illustrative Rs 3,221 before 18% GST.

Will random surveyor allocation get my claim paid faster?

The circular's goal is a fairer, more consistent assessment rather than a specific speed guarantee. Because allocation is automated, disputes over which surveyor inspected a loss should fall, and grievance escalation runs through the insurer's grievance officer to the Insurance Ombudsman under the companion 2024 policyholder-protection framework.

Should I buy the zero-depreciation add-on?

It depends on your risk exposure. In the worked claim, zero-depreciation lifted the payout from Rs 49,000 to Rs 59,000 — a Rs 10,000 difference on a single Rs 60,000 repair. If your car is under 5 years old and you drive in dense traffic, the add-on premium is usually justified; the claim estimator lets you test the trade-off against your own numbers.

Does making a small claim really cost me more than the claim?

Often, yes. A single claim can reset your No Claim Bonus from 50% to 0%, and rebuilding it takes five consecutive claim-free years. On a Rs 14,000 base own-damage premium, forfeiting a 50% NCB adds Rs 7,000 back to the next renewal alone, before compounding across later years — frequently more than a small dent claim is worth.

Where can I read the circular itself?

The Master Circular on General Insurance Business 2024 is published on the regulator's document portal at irdai.gov.in. For the underlying statutes, the Motor Vehicles Act 1988 and the Insurance Act 1938 are both hosted on the Government of India's India Code repository.