The Ministry of Road Transport and Highways (MoRTH) has increased the third-party (TP) motor insurance premium for various categories of vehicles with effect from June 1. The decision is likely to raise the insurance cost of cars and two-wheelers.
According to the revised rates notified by the MoRTH, the premium for new private cars is hiked between 1 percent and 23 percent. The premium of private cars with an engine capacity of 1,000 cc is being hiked by 23 percent and will attract rates of Rs 2,094 compared to Rs 2,072 in 2019-20.
For cars with an engine capacity between 1000cc and 1500 cc, the premium is hiked by 12 percent and will cost Rs 3,416 compared to Rs 3,221 and cars above 1500cc, the premium is hiked by 1 percent.
For two-wheelers under 75cc, the premium is hiked by 177 percent; for vehicles with engine capacity between 75cc and 150cc, the premium is hiked by 17 percent. Two-wheelers with engine capacity above 150cc but not exceeding 350cc, the premium is hiked by 35 percent and for that above 350cc, the premium is hiked by 16 percent.
After a two-year moratorium due to the COVID-19 pandemic, the revised third-party insurance premium will come into effect from June 1. Earlier, third-party rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI). This is the first time MoRTH has notified the third-party rates in consultation with the insurance regulator.
The premium for electric private cars under 30 kw is hiked by 27 percent; 11 percent for vehicles with a capacity between 30 kw and 65 kw, and 1 percent for that above 65 kw.
The premium for electric two-wheelers under 3 kw is hiked by 177 percent; with a capacity between 3 kw and 7 kw, it hiked by 17 percent; for vehicles above 7 kw and not exceeding 16 kw, it is hiked by 35 percent and for that above 16 kw, the premium is hiked 16 percent.
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 MoRTH has provided a discount of 15 percent on insurance premiums for educational institution buses. For private cars registered as vintage cars, the discount is as high as 50 percent.
The ministry has provided a discount of about 15 percent for electric vehicles and 7.5 percent on hybrid electric vehicles.
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.