Third Party Car Insurance Premium Hike Proposed by IRDA

We all know that auto insurance is mandatory in our country. Auto insurance comprises of few components and any change whether increase or decrease impacts car insurance premium. A vehicle insurance policy mainly consists of third party car insurance, own car damages and third party property damages. Out of these components, an individual must buy an insurance policy that provides cover for third party car damages. Hence, it can be said that third party liability cover is the aspect from all insurance components which is necessary. 

Insurance market in India is flooded with insurance options. An individual has the choice to buy insurance policies from various providers such as ICICI Lombard, Future Generali, HDFC Ergo, New India Assurance, Reliance General insurance, SBI General insurance company and many more other companies offer wide variety of motor insurance plans in order to lure customer of every segment.

Every company offers cheap car insurance policies with multiple options and they provide policies for particular insurance coverage such as third party insurance cover and own party damages. Third party car insurance is the portfolio which sees claim ratio of more than any other portfolio due to it being mandatory to buy.

In India, motor insurance plans can be bought online which has emerged as the most convenient way to buy auto insurance as it is cheap compared to other modes of purchasing insurance. Insurance Regulatory Development Authority is the institution that governs insurance laws in the country and also responsible to make any changes related to insurance. It has recently announced to hike third party insurance premium for commercial vehicles as well as personal vehicles.

Hike in single component of the auto insurance policy has been witnessed after a long gap resulting in expensive insurance policies. This hike in third party car insurance premium will impact overall car insurance premium as well. This hike is expected to benefit car insurance providers as they will yield more money in the form of higher car insurance premiums.

This change will not impact personal car owners that hard as compared to commercial vehicle owners as hike in third party cover is more for commercial car insurance policies. It will also impact people buying high end sports utility vehicles as these cars tend to be more expensive and now with hike in insurance premium, they will also face the heat.

Written By: PolicyBazaar - Updated: 20 August 2020
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