Third-party motor insurance to increase from tomorrow: Things you should know

If you are looking to buy a new car or a two-wheeler tomorrow or later, get ready to shell out more to drive them out of the showroom. Price of passenger vehicles is set to rise as the rate of third-party motor insurance has been hiked across various categories. The new rates will be applicable from tomorrow, June 1. A notification issued by the Ministry of Road Transport and Highways had earlier shown how the new rates will affect pricing of new cars and two-wheelers in coming days.

According to the new third-party motor insurance rates, passenger cars with an engine of 1.0-litre capacity will have to pa of ₹2,094, up by ₹22 from ₹2,072 paid earlier. Third-party motor insurance rates for passenger cars in the 1,000 cc and 1,500 cc bracket used to be ₹3,221. From June 1, customers will have to pay ₹195 more for the same. However, those looking to buy cars with engine capacity of more than 1,500 cc will have to pay less, but it is a nominal ₹7 difference.

Thos looking to buy two-wheelers above the 150cc category will see an increase of 15 percent in the rate. Bikes or scooters with engine capacity between 150cc and 350cc will have to dish out a premium of ₹1,366. Those looking to buy two-wheelers with more than 350cc capacity engine will have to pay ₹2,804 as premium

There is some relief for those looking to an electric vehicle or a hybrid vehicle. The new rates will offer a discount of 7.5 per cent on the premium for hybrid electric vehicles. Pure electric cars which do not have more than 30KW of battery will have to pay a premium of ₹1,780. For EVs with battery capacity between 30 KW and 65 KW will attract a premium of ₹2,904.

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).