Third-Party Motor Insurance Set to Become Costlier from April 1
- For private cars, the proposed premiums range from Rs 2,094 to Rs 7,897, based on the cubic capacity
- For two-wheelers, the range is Rs 1,366 to Rs 2,804, based on the cubic capacity
- 15% discount proposed for electric private cars, electric two-wheelers and other EV categories
- 7.5% discount for hybrid electric vehicles on third-party motor premiums
Get ready to pay higher premiums for third-party motor insurance if you are planning to renew your policy in the next financial year, starting April 1, 2022. It is mandatory for all vehicle owners to buy this cover. Third-party motor insurance basically indemnifies the policyholder against damages, injury or death of a third party and pays up on behalf of the policyholder.
According to a recent draft notification issued by the Ministry of Road Transport And Highways, in consultation with the Insurance Regulatory and Development Authority of India (Irdai), the premiums rates for third-party motor insurance will be revised for the next financial year 2022-23.
Usually, third-party motor insurance premiums are revised annually but this time, the hike was put on hold because of the Covid 19 pandemic. Effectively, the third-party premiums will rise after a gap of two years. This will also lead to an increase in comprehensive motor insurance policies, which include third-party, own-damage and other covers.
New Premium Rates For Different Vehicles
The proposed premium rates have been revised for both three-wheelers and two-wheelers. Here are the proposed revised rates for some of the categories.
Private cars: Private cars with 1,000 cubic capacity (cc) will have a premium rate of Rs 2,094, private cars that are 1,000-1,500 cc will be priced at Rs 3,416, while those above 1,500 cc will see their premiums go up to Rs 7,897.
Third-party insurance can also be bought with three-year and five-year policies that come with a single upfront premium.
This premium rate for new private cars has been revised to Rs 6,521-24,596 for three-year policies.
Two-weelers: These vehicles over 150 cc but not exceeding 350 cc will have premiums of Rs 1,366 and the ones over 350 cc will attract rates of Rs 2,804.
For five-year policies with a single premium taken for new two-wheelers, the revised premiums have been proposed in the range of Rs 2,901 to Rs 15,117; the rates will differ in keeping with the cubic capacity of the vehicle.
Vehicles that carry goods: For commercial vehicles that are used to carry public goods, the proposed premium rates range between Rs 16,049 and Rs 44,242; the rates will differ according to the gross weight of the vehicle. For the private ones, the revised premiums range from Rs 8,510 to Rs 25,038.
Incentives For Electric and Hybrid Vehicles
The proposed notification has incentivized environment-friendly vehicles, including electric and hybrid electric vehicles. The government has included four new categories of vehicles in the rate change notification. These are electric private cars and two-wheelers (these were first introduced in FY2019-20), quadricycles (introduced in FY2019-20), electric goods carrying commercial vehicles and electric Passenger carrying vehicles (proposed in FY2020-21) and hybrid electric vehicles (proposed in FY2020-21).
“A discount of 15 per cent is proposed for electric private cars, electric two wheelers, electric goods carrying commercial vehicles and electric passenger carrying Vehicles,” stated the notification.According to the notification, electric private cars will attract a premium between Rs 1,780 and Rs 6,712; the rate will depend on the capacity of the vehicle expressed in kilowatts.
Similarly, two-wheeler electric vehicles will attract premiums ranging from Rs 457 to Rs 2,383.Also, hybrid electric vehicles will attract a discount of 7.5 per cent on motor third-party premiums.
Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Mumbai - 400025, India, Tel No: 022 - 2288 2460, 022 - 2288 2470. Composite Corporate Agent License No.CA0113. Insurance is the subject matter of solicitation. ICICI Securities Ltd. does not underwrite the risk or act as an insurer. Insurance is the subject matter of the solicitation. The advertisement contains only an indication of the cover offered. For more details on risk factors, terms, conditions and exclusions, please read the sales brochure carefully before concluding a sale. ICICI Securities Ltd. is act as a distributor of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism.