The premium rates for third-party motor insurance is set to increase, as the Ministry of Road Transport and Highways (MoRTH), in coordination with the Insurance Regulatory and Development Authority of India (IRDAI), has released a draft notification for their upward revision.
The notification, that was put out on March 4, proposes the third party premium rates for a broad categories of vehicles. The new rates, once finalised, will come into effect for the financial year 2022-23.
This will be the first time in the last two years when the insurance premium in the motor vehicles category would be hiked. The revision was put on hold in the current fiscal, as well as in FY21, due to the onset of COVID-19 pandemic.
As per the draft released by the MoRTH, a third-party premium of Rs 1,366 is proposed for two-wheelers with cubic capacity (cc) higher than 150 but lower than 350. For bikes with more than 350cc engine, a premium of Rs 2,804 is proposed.
Private four-wheeler cars of up to 1,000 cc will be charged at a rate of Rs 2,094, as per the draft, whereas, the same would increase to Rs 3,416 for 1,000-1,500cc engine vehicles. For cars exceeding 1,500cc engine, the premium proposed is Rs 7,897.
Commercial vehicles used for carrying public goods will draw a premium ranging from Rs 16,049 to Rs 44,242, depending on the gross vehicle weight. Those commercial vehicles that are being used to carry private goods will draw a higher premium, from 8,510 to s 25,038, as per the draft notification.
The ministry has also proposed to incentivise the use of electric vehicles, by offering a 15 percent discount for electric two-wheelers and cars, as well as electric passenger and commercial vehicles.
Electric two-wheelers, as per the draft, will draw premium ranging from Rs 457 to Rs 2,383, depending on the capacity noted in the form of kilowatts. For electric private cars, the rate will vary from Rs 1,780 to Rs 6,712 based on their capacities.
The draft also notes that hybrid electric vehicles will be eligible for a discount of 7.5 percent on the third party premiums.
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