All about the KYC process in car insurance

Know Your Customer, better known as KYC, is not really a new concept; people are already aware of the same. Loans, de-mat accounts, stock investment, etc., have already mandated KYC for a long. Let us discuss all car insurance KYC and the KYC process.

Is KYC mandatory for car insurance?

As of 1st January 2023, the IRDAI (Insurance Regulatory and Development Authority of India), Know-Your-Customer or KYC is now a mandatory document for purchasing all sorts of insurance plans, be it general insurance or life insurance. So, now if you are planning to purchase new car insurance or renew it, car insurance KYC is mandatory by law.

KYC-compliant process for purchasing car insurance:

There are different ways in which you can complete the KYC process. Check out the details below for a better understanding:

1. Central KYC (C-KYC)

When you purchase car insurance online or renew it, you can submit a C-KYC to fulfil the process. C-KYC is available to a person who has a demat account, has invested in mutual funds or stocks or has taken an auto loan. Even with the PAN card, the insurer can get the KYC details.

2. E-KYC

The e-KYC number of the individual can also be used to fulfil the KYC mandatory process for car insurance. As this is an Aadhaar-based verification, all you need to do is complete the KYC process online through OTP sent to your mobile number.

Once you have your eIA (e-Insurance Account) details, you can share it with your insurer. Your eIA can store details of all your insurance policies in digital form without the hassle of maintaining physical records. Changes in your eIA, such as contact details and address, can be updated once, and the same would be reflected across all your insurance policies. This is a seamless way to maintain records of all your life and non-life insurance policies, including car insurance plans.

3. Identity and address proof

Some car insurance customers may not have C-KYC or e-KYC. So, even by presenting your identity and address proof, you can regulate the KYC process. The insurer will fetch your KYC number and details via your identity proof, address proof, and driving licence/passport.

What has changed with KYC?

The newly mandated car insurance KYC is a customer-centric approach and idea regulated and mandated by IRDAI. Where earlier it was a voluntary decision to submit or not submit KYC at the time of purchasing the policy, now it is mandatory for every insurance seeker to provide KYC details. Earlier, usually claims beyond INR 1 lakh required KYC documents.

Also, the insurance purchasing and renewing process is expected to catch a high pace, with the KYC becoming a mandatory document. The insurers will also have a fair means to eliminate false claims and retrieve customer information in a more transparent manner.

Conclusion

KYC is a mandatory step to be done in order to purchase car insurance. Make sure you do the same at the time of purchasing/renewing your car insurance. Since the car insurance KYC and all other insurance KYC are meant for new customers, the existing customers have a one-year time frame to get their KYC compliance done with their insurer. Money laundering, false claims, insufficient customer information, and slow insurance processes are all going to change for good with the introduction of the mandatory KYC process.

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