Third-Party Motor Insurance Premium to Increase from June 1
Vehicle insurance will get dearer with the Ministry of Road Transport and Highways announcing that the third-party motor insurance premium for various categories of vehicles to be increased from June 1 this year.
The decision is likely to increase the insurance cost of cars and two-wheelers.
According to the revised rates notified by the road transport ministry, private cars with an engine capacity of 1,000 cc will attract rates of ₹ 2,094 compared to ₹ 2,072 in 2019-20.
Similarly, 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.
Two-wheelers over 150 cc, but not exceeding 350 cc will attract a premium of ₹ 1,366 and for two-wheelers over 350 cc, the revised premium will be ₹ 2,804, the order stated.
After a two-year moratorium due to the Covid-19 pandemic, the revised TP insurance premium will come into effect from June 1.
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Earlier, TP rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI). This is the first time that the road transport ministry has notified the TP rates in consultation with the insurance regulator.
According to the ministry's notification, 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, the notification said.
The premium for goods carrying commercial vehicles exceeding 12,000 kg but not 20,000 kg will increase to ₹ 35,313 from ₹ 33,414 in 2019-20.
In the case of goods carrying commercial vehicles exceeding 40,000 kg, the premium will increase to ₹ 44,242 as against ₹ 41,561 in 2019-20.
The third-party insurance cover is for other than the damage made by a person himself and is mandatory that a vehicle owner to purchase.
This insurance cover is for any collateral damage to a third party, generally a human being, caused due to a road accident.