Design Credits: Rakesh Mohan
Planning to get a car? Rush before it’s too late. With the vehicle prices and insurance premiums scheduled to go up in the next financial year, owning a vehicle might just burn a hole in your pocket. And purchasing the insurance for your vehicle in the next financial year will lighten your wallet even more. The third party motor insurance is slated for a hike 1st April onwards. The hike is applicable to private cars, two-wheelers and heavy load carriers.
Third party motor insurance refers to the mandatory insurance that the vehicle owners need to purchase to provide compensation to the accident victims. This proposed hike by the Insurance Regulatory and Development Authority of India (IRDAI) will be the sixth one in six years as the regulatory body revises the cost of mandatory cover every year after taking into account inflation, average claim amounts and expenses.
The premiums for private cars has been hiked across all sectors. The revised rates are:
- 1000 CC – Rs. 1,468 from Rs. 784
- 1000 CC – 1500 CC – Rs. 1598 from Rs. 925
- Above 1500 CC – Rs. 4931 from Rs. 2853
For two-wheelers, the revised premium rates are:
- 150 CC to 350 CC – Rs. 554 from Rs. 350
- Above 350 CC – Rs. 884 from Rs. 680
Commercial vehicles are the most affected with a steep rise in third party motor cover premiums. The revised rates are:
- Goods carrying three wheelers: Rs. 3415 from Rs. 2,440
- Trucks with carrying capacity of 7,500 kg: Rs. 9818 from Rs. 8420
The motor insurance portfolio for non-life insurance companies has been running at a loss for years. Past hikes though, have helped to recover some of the losses but weren’t enough to completely revive the portfolio.
Along with a hike in cover premiums, insurers are also demanding a limit on liability and specifying the time period within which a claim needs to be filed. Currently, the claim amount is unlimited and a claim can be filed any time after the accident. There have been cases where claims have been filed eight years after the accident!
The insurance regulator is also looking to provide a web-based facility to help the claimants.
Additional Reading: 7 Add on Covers on Your Car Insurance You Definitely Need.