Govt proposes hike in third-party motor insurance premium from April

The Ministry of Road Transport has proposed an increment in the third-party motor insurance premium for various categories of vehicles, which is likely to hike insurance cost of car and two-wheelers from April 1. As per the revised premium rates, private cars with 1,000 cubic capacity (cc) will be charged ₹2,094 as compared to ₹2,072 in 2019-20.

Private cars with 1,000 cc to 1,500 cc will attract rates of ₹3,416 as compared to ₹3,221 in the fiscal of 2019-20. Whereas owners of cars above 1,500cc will see a premium of ₹7,897 compared to ₹7,890. For two-wheelers over 150 cc but not exceeding 350 cc, premium rates will start at ₹1,366 and for two-wheelers over 350 cc, the revised premium will be ₹2,804.

After two years moratorium due to Covid-19 pandemic, the revised TP insurance premium will come into effect from April 1. This is also the first time that the road transport ministry will notify the TP rates in consultation with the insurance regulator. Earlier, TP rates were notified by the insurance regulator IRDAI.

The draft notification of the transport ministry also mentioned that a discount of 15 per cent is proposed for electric private cars, electric two-wheelers, electric goods-carrying commercial vehicles and electric passenger-carrying vehicles. For hybrid vehicles, a discount of 7.5 per cent has been proposed on Motor TP premium rates as an incentive to use environment-friendly vehicles.

Electric private cars not exceeding 30KW will attract a premium of ₹1,780, while for those exceeding 30 KW but not exceeding 65 KW premium will be ₹2,904. The premium for goods carrying commercial vehicles (exceeding 12,000 kg but not exceeding 20,000 kg) would increase to ₹35,313 from ₹33,414 in 2019-20.

The transport ministry has invited suggestions on the draft notification by March-end.

(with inputs from PTI)