Regulator Insurance Regulatory and Development Authority of India (IRDAI) has proposed up to 50% increase in insurance premium for cars, motorcycles as well as commercial vehicles from April 1.
The hike for two-wheelers would be in the range of 16 to 50% and for commercial vehicles up to 50%. The regulator has revised the mandatory cover rate every year for the past six years. The final pricing will be set this month after insurers submit their comments.
The Insurance Regulatory and Development Authority of India (Irdai) has released an exposure draft on premium rates for motor third-party insurance covers for FY18 and invited stakeholders comments till 18 March.
Third-Party Motor Insurance:
A third-party insurance policy protects policyholders from the liabilities which arise in the event of an accident which may lead to damage to the vehicle, injury or death. It brings protection against unforeseen circumstances
A third party commercial vehicle insurance can be defined as the policyholder’s insurance against disability, death or damage which is caused to the third-party in case of an accident. At times the third-party insurance is also called the “Act Only” cover as it applies to the third person involved in an accident instead of the vehicle owner or the insurer.
Proposed Hike In Insurance Premium:
The hike proposed in mid-segment cars (1,000-1,500 cc), as well as bigger cars and SUVs, is 50%. The proposal is to increase premium to Rs. 3,355 for cars up to 1,000 cc and Rs. 9,246 for bigger ones.
No change has been proposed for two-wheelers with engines of capacity up to 75 cc. However, for sportbikes and superbikes (more than 350 cc), Irdai proposes to increase the premium to Rs. 1,194 from the present Rs. 796, up 50%. The increase has also been proposed for entry level bikes (77-150 cc) and performance category (150-350 cc).
For commercial vehicles, Irdai has proposed an up to 50% hike in premium rates for different categories of CVs. Tractors rated at up to 6 HP can now attract Rs. 765 insurance premium, up from Rs. 510.
New TP Insurance Premium Rates:
Let’s take a look at the latest third party premium rates as having been laid down by the IRDA:
|Cars||Old Premium||Premium for 2016-17||Change|
|Up to 1000 cc||Rs. 1468||Rs.2055||40%|
|1000cc to 15000cc||Rs. 1598||Rs.2,237||40%|
|1500cc and above||Rs. 4931||Rs. 6,164||40%|
|Two wheelers||Premium for 2016-17|
|Up to 75cc||Rs.569|
|350cc and above||Rs.796|
Motor third-party insurance is mandatory for vehicles. The rates are revised each financial year. Irdai said the proposed premiums for the next fiscal have been calculated on the accident-related data from 2011-12 to 2015-16 provided by the Insurance Information Bureau of India (IIBI).