Third party motor insurance premium is likely to increase for various categories of vehicles from April 1 with the Union Ministry of Road Transport and Highways, in a draft notification, mooting a moderate-to-sharp upward revision as well a reduction for some.
For private cars, depending on their engine capacity, the increase ranges from ₹7-195. For two-wheelers, the proposed hike varies from ₹58 to ₹481. A reduction ₹38 has also been suggested for 75-150 cc bikes (commute category).
An across-the-board increase has been mooted for the long term single premium motor TP cover that is mandatory for new cars and two-wheelers. The premium rates will also go up for public goods carriers and vehicles under various other categories. For some vehicles such as buses, including school buses, the proposed premium is less than the existing rates.
A discount of 15% has been proposed for electric vehicles, including private cars, two-wheelers, goods carrying commercial vehicles and passenger carrying vehicles. For hybrid EVs, the draft has proposed a 7.5% discount.
The Ministry said the draft notification has been prepared in consultation with insurance regulator IRDAI. It has almost three years since the motor TP tariff had been revised – the existing rates came into force on June 16, 2019. While the revision was delayed in 2019 presumably on account of general elections, the last two years the rates were left untouched in the backdrop of the pandemic impact. Earlier this year, the general insurers reportedly had sought a 15-20% increase in the motor third party premium rates.
In the event of the proposal being implemented without change, the motor third party premium for private cars up to 1000 cc will be ₹2,094 as aganist existing ₹2,072; 1000-1500 cc - ₹3,416 (Rs.3,221); and above 1500 cc - ₹7,897 (₹7,890). For two-wheelers upto 75 cc, the premium will be ₹538 (₹482); 150-350 cc - ₹1,366 (₹1,193); and above 350 cc -₹2,804 (₹2,323). Owners of two-wheelers in the 75-150 cc will pay less ₹714 (₹752). The three year single premium for new private car will be as follows: Up to 1000 cc - ₹6,521 (₹5,286); 1000-1500 cc – ₹10,640 (₹9,534); above 1500 cc - ₹24,596 (₹24,305). The five year single premium for new Two Wheeler will be: Up to 75 cc – ₹2,901 (₹1,045); 75-150 cc - ₹3,851 (₹3,285); 150-350 cc – ₹7,365 (₹5,453); and above 350 cc - ₹15,117 (₹13,034).
