Motor insurance premium deferred amid national lockdown due to coronavirus
- The relaxation comes as a relief for vehicle owners looking for renewal of policies.
- The government has issued statement providing guidelines on how to renew policies after the lockdown ends.
The Government has allowed motor insurance policy holders to defer payment of their renewal premium falling due during the period of the lockdown due to coronavirus pandemic.
In a notification, the finance ministry has allowed third party motor insurance premium dues falling during the period of national lockdown between March 25 and April 14, to be paid on or before April 21 for the renewal of policy without any penalty.
The delayed payment will also 'ensure continuity of the statutory motor vehicle third party insurance cover from the date on which the policy falls due for renewal,' department of financial services said in a notification dated April 1.
The changes have been made in view of the prevailing situation in the country coronavirus disease and consequent 21-day national lockdown.
The latest changes in compliance measures for insurance customers had come after finance ministry allowed similar deferral in performance of statutory duty in respect of direct tax and indirect tax last week.
The insurance sector regulator IRDAI has issued an order saying it will not revise third party motor insurance premium rates for all vehicle categories for the financial year 2020-21.
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Earlier, in March, it had proposed a substantial increase in premium rates for cars, two-wheelers and transport vehicles from the next financial year starting April 1, 2020. The steepest hike was proposed for privately-owned electric cars.
The IRDAI had 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.
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).
(With inputs from agencies)