Third-party insurance premium for cars, two-wheelers and transport vehicles may go up with regulator IRDAI proposing substantial increase in premium rates from the next financial year starting April 1, 2020.
The Insurance Regulatory and Development Authority of India (IRDAI) has proposed to increase the third-party (TP) motor insurance premium rates for cars below 1,000 cc to ₹2,182, up about 5.3 per cent from the existing ₹2,072 during the financial year 2020-21.
Similarly, for cars falling between 1,000 cc and 1,500 cc also, premium is being proposed to be increased to ₹3,383 from the existing ₹3,221. However, for luxury cars (with engine capacity of over 1,500 cc), no change in TP premium has been proposed from the existing ₹7,890.
Normally, the TP rates are revised from 1 April.
The regulator has come out with a draft of new rates for TP premium for the next financial year. It has sought comments from stakeholders on the proposed rates till May 29.
According to the draft, TP for two-wheelers below 75 cc is proposed at ₹506, up from the existing ₹482. Hike has also been proposed for those between 75 cc and 350 cc. The hike in bikes with engine capacity exceeding 350 cc has been proposed at ₹2,571 from ₹2,323.
The IRDAI also proposed to raise the TP rate for electric cars and two-wheelers.
The three-year single TP premium may also be raised to ₹5,167 from the existing ₹4,493 for private electric cars not exceeding 30 kilowatts (KW).
In case of two-wheelers (not exceeding 3 KW), the new TP premium may go up to ₹1,040 from the current ₹888.
The rate increase has also been proposed for taxis, buses and trucks.