New cars and bikes will cost more as third-party insurance rates hiked from June

If you are planning to buy a new car or two-wheeler, get ready to pay more to drive one home from June 1. Buying a new car or two-wheeler is going to be expensive across the country from next month as the cost of third party insurance premium has been hiked. The rates have been hiked for the first time in last three years. The Ministry of Road Transport and Highways issued a notification on Wednesday, giving out details on how much one should pay after the hike.

According to the notification, there will be a premium increase of 15 percent on two-wheelers above 150cc. Similarly, from June 1, a premium of 6 percent will have to be paid on a private car from 1000cc to 1500cc. Private cars with an engine capacity between 1,000 cc and 1,500 cc will attract rates of ₹3,416 compared to ₹3,221, while owners of cars above 1,500 cc will see a drop in premium from ₹7,897 to ₹7,890.

Apart from this, the third party premium for the new private car will have to be paid 23 percent more. This is for vehicles up to 1000cc with a one-time tenure of 3 years. According to the ministry, private cars with an engine capacity of 1,000 cc will attract rates of ₹2,094 compared to ₹2,072 in 2019-20.

If you buy a new private car, then the third party insurance premium of this car will be 11 percent more expensive. This premium will be provisioned for vehicles from 1000cc to 1500cc. Similarly, for new two wheelers, the third party premium will have to be paid 17 percent more. That is, overall the final price of your vehicle is bound to increase.

There could be relief for those looking to buy hybrid electric vehicles. According to new rates, a discount of 7.5 per cent on the premium shall be allowed for hybrid electric vehicles. While electric private cars not exceeding 30KW will attract a premium of ₹1,780, those exceeding 30 KW but not 65 KW will attract a premium of ₹2,904.

There has been a slight increase in third party insurance premium on commercial goods vehicles as well.

The third-party insurance cover is for other than own damage and is mandatory along with the own damage cover that a vehicle owner has to purchase. This is the first time that the ministry itself has issued a notification on the third-party motor insurance rate hike. Earlier, the third-party rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI).