Motor insurance: Third-party covers gets costlier
Since 2011, the rates for mandatory third-party motor insurance are being fixed every year by the Insurance Regulatory and Development Authority of India and notified in the last week of March and the revised rates becomes effective from April 1. But this year, in a circular issued on March 28, the IRDAI had not changed the rates. The Insurance Regulator has now revised the rates with effect from June 16, 2019, for the year 2019-20, instead of 1st April 2019.
The premium for mandatory third-party liability insurance for private cars up to 1000 cc has been increased by 12% from ₹1,850 to ₹2,072, and for those above 1000 cc but less than 1500 cc, the rise will be 12.5% to ₹3,221. For two-wheelers, the increase will range between 4% to 21%.
There is no change in the third-party premium rate for private cars above 1500 cc. and for two-wheelers with engine capacity above 350 cc.
This time, the regulator has categorized buses into school buses and other buses and has also introduced a new segment for electric vehicles in private cars and two-wheelers.
The regulator has proposed a 15% discount on the premium for electric vehicles. In case of a one-year policy for electric private cars not exceeding 30 kilowatt, the premium has been fixed at ₹1,761, for those between 30 kilowatt and 65 kw, the premium is set at ₹2, 738, and for those exceeding 65 kilowatt the premium is ₹6,707.
For a 3 to 5 years cover, the premium will be ₹4,493 for electric private cars not exceeding 30 kilowatt, ₹8,104 for those between 30 kilowatt and 65 kw, and for those exceeding 65 kilowatt the premium has been fixed at ₹20,659.
For New Vehicle only
The Supreme Court’s ruling makes third-party insurance mandatory for all new vehicles plying on Indian roads, the IRDAI had made it mandatory for all vehicles bought after September 1, 2018 to purchase long-term policies. The cover is for three years in case of private cars and five years for two-wheelers.
Experts say the long-term covers will be cost-effective in the long-run. In case of private cars below 1000 cc, the rate has been fixed at ₹5,286. For those between 1000 cc and 1500 cc, the premium will be ₹9,534 and those over 1500 cc, the premium will be ₹24,305.