In the next month, buying a vehicle will become more expensive due to the government’s increase in the third-party (TP) motor insurance premium. In India, the hike in third party insurance will result in an increase in the cost of all vehicles, including two-wheelers and four-wheelers.
After a two-year moratorium due to the Covid-19 pandemic, the revised TP insurance premium will come into effect from June 1, reports PTI.
Earlier, TP rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI). This is the first time that the MoRTH 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.
As per the official notification by the ministry, private cars with an engine capacity of 1,000 cc will attract rates of Rs 2,094 compared to Rs 2,072 in 2019-20. Private cars with an engine capacity between 1,000 cc and 1,500 cc will attract rates of Rs 3,416 compared to ₹3,221.
Meanwhile, cars above 1,500 cc will see a drop in premium from Rs 7,897 to Rs 7,890. Two-wheeler with a 150cc-350 cc engine capacity will attract a premium of Rs 1,366 and for two-wheelers, over 350 cc the revised premium will be Rs 2,804.
While electric private cars not exceeding 30KW will attract a premium of Rs 1,780, those exceeding 30 KW but not 65 KW will attract a premium of Rs 2,904.
The premium for goods carrying commercial vehicles exceeding 12,000 kg but not 20,000 kg will increase to Rs 35,313 from Rs 33,414 in 2019-20. In the case of goods carrying commercial vehicles exceeding 40,000 kg, the premium will increase to Rs 44,242 as against Rs 41,561 in 2019-20.
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 insurance cover is for any collateral damage to a third party, generally a human being, caused due to a road accident.