Your third-party (TP) motor insurance premium may go up by 2-10 percent from April 1.
Insurance Regulatory and Development Authority of India (IRDAI) on March 4 released the draft circular to this effect.
Motor third-party insurance covers a vehicle owner from liabilities in case he/she hits a person on the road causing death or disability. It is mandatory for all vehicle owners, though only 50 percent vehicles running on Indian roads are uninsured.
IRDAI has proposed a discount of 15 percent for the electric vehicle category TP premium. The regulator said it will incentivise usage of environmental friendly vehicles. Further, a discount of 7.5 percent on motor TP premium for hybrid electric vehicles is also proposed.
Regular car and bikes
For those driving cars, the premium could go up by an average of 5 percent. However, for those driving cars above 1,500cc, the premium rates have been left unchanged at Rs 7,890.
When it comes to two-wheelers, the premium rates could go up by 2.3 percent to 10.7 percent depending on the engine capacity. In this category, there is a premium increase from 75cc and below to 350cc and above.
In the 75-150cc category, the premium is proposed to be hiked from Rs 752 per annum to Rs 769.
For goods carrying vehicles, the premium hike is between 2-7 percent. Similarly, for taxis (proposed 10.4 percent premium hike), buses (including school buses) and ride-sharing bikes, the premium could be marginally hiked.
Those planning to buy new vehicles have to shell out more for the long-term TP product. Those buying cars have to buy a three-year product which may cost 6.4-15 percent more (except 1500cc above category where it is unchanged).
Those buying a two-wheeler are mandated to buy a five-year motor TP cover which may cost 17-19.3 percent more (except above 350cc category where it is unchanged) from April 1.
Electric vehicles
For electric vehicles, the premiums would rise by 5 percent for private cars (except above 65KW where it is unchanged) while the hike could be between 2-10 percent for two-wheelers.
If you wish to buy a new electric vehicle, a three-year TP cover for car and five-year cover for bikes will be mandatory. Here the premium rise could be between 3-15 percent from April 1.
However, overall the premium rates for electric vehicles are much cheaper than that of regular cars and bikes.
In case of the quadricycle category, the premium rates could see 5 percent rise for private car category. However, for new vehicles (mandatory three-year TP cover), the premium may go up by 15 percent.
Motor TP premium is regulated by IRDAI. The insurance regulator revises the premium rates every year depending on the vehicle type, engine capacity and past claims experience.
All stakeholders have to present their views by March 20. Post this, the final TP premium rates for FY21 will be announced by IRDAI.
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