loader2
Login Open ICICI 3-in-1 Account
  • Text Size
  • Text to Speech
  • Color Contrast
  • Pause Animations

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

General Insurers take a hit as Motor Third Party claims costs set to rise post court ruling

ICICIdirect Research 18 Jul 2026 DISCLAIMER

In a recent judgment, the Supreme Court significantly increased compensation payable in fatal motor accident cases involving homemakers by introducing a separate head of "Loss of Domestic Care" assigning a notional value of ₹30,000 per month for services rendered by a homemaker.
For example, if a 40-year-old homemaker dies in a road accident, his family will now receive compensation not only for conventional heads but also for the economic value of the household services she provided. This materially increases the total claim payable compared with the earlier framework.
As a result, Motor Third-Party (TP) claim payouts for general insurers are expected to rise by 12–15%, leading to higher claim cost, thereby impacting earnings. Factoring in impact of judgement, listed general insurers with meaningful exposure to the motor insurance segment witnessed a correction to the tune of 8-15% as the market factored in the likely increase in future claim liabilities.
With claim cost set to rise, the industry's focus is now on revision in Motor TP premium rates, which has long been sought by insurers, and would help restore pricing adequacy, offset higher claims burden and support underwriting profitability.

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere