Third-party Motor Insurance Premiums to See Marginal Hike

Finally, the revised motor third-party insurance premiums are out in the press and have already been into effect from April 1, 2015. All vehicle owners can now take a sigh of relief as there has been only a slight increase of few hundred rupees in the premiums for most of the vehicles.

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According to the motor premium rates revised by Insurance Regulatory and Development Authority of India (IRDAI), private car and two-wheeler owners will have to pay extra premium of Rs. 65 to Rs. 340.

Customers having two-wheelers above 350 cc should be least bothered about the revised rates as their premium slab is kept unchanged. For people owning vehicle below 75 cc there is just a slight increase in the slab by Rs. 100.

Likewise, rise in premiums has been noticed in case of goods vehicles, public carriers (other than three-wheelers) and heavy vehicles above 12,000 kg. A trivial amount of Rs. 100 is increased for three-wheelers that carry less than six passengers.

On an average, the motor third-party insurance premiums are hiked within the range of 14-108%. Even, IRDAI had proposed the same range for hike which was expected to take effect from April 1.

The general insurance industry had favored a hike of 40-50 per cent against a steeper raise proposed by regulator IRDAI.

On the contrary, many senior executives and experts have also showed their resentment. According to them, small vehicles such as two-wheelers and three-wheelers should have lower premium rates and heavy commercial vehicles should be charged more premiums.

“Overall, consumers conveyed their dissent against proposal to increase the rates. The general insurers conveyed that the current premium rates are inadequate and revision in rates matching levels of ultimate loss ratio of companies is required,” TS Vijayan, Chairman of IRDAI said in an order issued on 31^st March 2015.

(Source: This article has been adapted from the article "Low rise for motor third-party insurance premiums" that appeared on April 01, 2015 in business-standard.com)