The Insurance Regulatory and Development Authority of India (IRDAI) has proposed a hike in premium rates for third-party coverage of all motor vehicles including two-wheelers, cars, and public transport carriers. The new premium rates will come into effect from this fiscal year (2019-20) onwards. IRDAI revealed this proposal through an exposure draft for the current financial year.
As per this proposal, cars below 1,000 cc have to pay Rs.2,120 for their yearly third-party insurance premiums from the existing Rs.1,850 per year. For cars with engine capacity between 1,000 cc and 1,500 cc, the IRDAI has proposed an increase in premium rate from Rs.2,863 to Rs.3,300 per year. The exposure draft did not propose any hike in premiums for luxury cars with engine capacity over 1,500 cc.
For two-wheelers with engine capacity between 75 cc and 150 cc, IRDAI has proposed an increase in premium to Rs.752 from the existing rate of Rs.720. For bikes with engine capacity between 150 cc and 300 cc, the premium rate has been revised to Rs.1,193 from the existing premium of Rs.985. There is no change in the premium rates for bikes with engine capacity over 300 cc.
For new cars and two-wheelers, there is no change in their long-term insurance premiums rates. For new two-wheelers, the mandatory term for long-term coverage is five years. For new cars, the mandatory long-term coverage term is set at three years.
Typically, the revised third-party rates for motor vehicles will come into effect from the 1st April of every year. This year, IRDAI has decided to continue with the old rates until new orders are issued. Also, the premium rates proposed in the exposure draft usually become the final rates every year.
IRDAI has also mentioned that any comments on the new proposed tariffs will be open till May 29. The proposed hike is based on the existing claims incurred for third-party coverage. Apart from this, the regulatory body has proposed a 15% discount in premiums for electric bikes and cars.
Source: Economic Times