Relief for Motor vehicle owners as third-party cover premiums to become cheaper

The Insurance Regulatory and Development Authority of India (IRDAI) has brought some relief for vehicle owners as they have proposed lower or flat rates for most vehicle categories in 2018-19. 

After increasing motor third-party (TP) premiums for two consecutive years, the IRDAI has proposed Rs 1,850 as motor TP premium for private cars not exceeding 1,000cc for 2018-19.

Earlier for 2017-18, the motor TP premium was Rs 2,055 and in the previous year, it is Rs 427 against Rs 569 for two-wheelers not exceeding 75cc.

Every year, the IRDAI revises premium rates after considering the number of claims made and loss ratio for insurers. 

All the vehicles need to have mandatory motor TP cover as it overcomes the liability arising from third-party claims due to accidents.

Motor TP insurance premium has been increased by 28% for cars in 1,000-1,500cc and those beyond 1,500cc categories were proposed by a 40% hike in rates during 2017-18. Similarly was the case for the two-wheelers in the 150-350cc category along with those exceeding 350cc. 

Now, Motor TP premiums would remain at the same levels for private cars in the 1,000-1,500cc and above 1,500cc categories.

IRDAI proposing the same motor TP premium for two-wheelers in the 75-150cc segment has marginally hiked for the 150-350cc category. However, a twofold hike has been proposed for two-wheelers exceeding 350cc with the motor TP premium at Rs 2,323. 

Under the ‘vintage cars’ segment, private cars could avail a discount of 50%. For goods carrying vehicles in several categories — 7,500-12,000kg, 12,000-20,000kg, 20,000-40,000kg and above 40,000kg, there will be a hike.

For goods carrying motorised three-wheelers and motorised pedal cycles, Motor TP premium would be reduced while a modest increase would be allowed in rates for tractors of up to 6HP.