IRDAI Increases Third-party Two-wheeler Insurance Premiums

In India, IRDAI regulates the premium rates for all types of insurance. After a long gap of two financial years, IRDAI recently proposed new premium rates for the third-party two-wheeler insurance policy. To know more about the revised premium rates, read on!

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IRDAI Announcement for Third-party Insurance Premium

The Insurance Regulatory and Development Authority of India (IRDAI) has recently announced the revised premiums for third party bike insurance. The last hiked premium was just before the onset of the pandemic, June 2019.

The bike insurance premium rates are usually revised annually, but due to the coronavirus outbreak in 2019, the government was stuck to the same premiums for two years. The new rates are effective from 1st April 2022.

About the Premium of Third-party Two-wheeler Insurance Policy

In India, the premium rates of third-party two-wheeler insurance rates are decided by the IRDAI, and all the insurance companies have to follow it. However, the insurance company has the liberty to fix the premium rate of standalone own damage insurance and comprehensive cover that includes add-on cover and own-damage parts as well.

Every year the IRDAI review the loss ratios of the motor insurance companies and the total number of claims raised by two-wheeler owners to decide this premium rate. Regardless, this is the first time that together the Union Road Transport Ministry and IRDAI have announced the revised premium rates in third-party two-wheeler insurance plans.

Before going further, let's understand the features of third-party two-wheeler insurance cover.

Features of Third-party Two-wheeler Insurance Policy

  • A third-party cover is mandated as per the Motor Vehicles Act 1988.
  • Under this, the third party gets compensated for the damages caused by your bike.
  • In case, a third person is injured physically or becomes permanently disabled, or leads to fatal death during an accident from your bike, the third-party policy will cover their medical expenses or pay a lump-sum amount for the cause.

Revised Premium Rates in Third-party Two-wheeler Insurance

As per the announced revised rates for two-wheelers, we have seen a hike of 12% for two-wheelers with less than 75 CC. On the other hand, the premium rates for the two-wheelers between 75-150 CC are decreased by 5%. The superbikes with a cubic engine capacity of 150-350 CC can see a hike in their premium rates by 15%. And a 21% hike in the premium for the bikes exceeding the limit of 350 CC.

To make you understand better, below, we have a table showing the increased premium rates for all the private two-wheeler single year insurance premiums-

Single-year Third-party Premium Hike for Two-wheelers in India

Bikes With Engine Capacity Premium Rates (FY 2019-20) in Rupees Premium Rates (FY 2022-23) in Rupees Change (In Percentage)
Bikes with an engine capacity of less than 75cc 482 538 12%
Bikes with an engine capacity between 75cc and 150cc 752 714 -5%
Bikes with an engine capacity between 150cc and 350cc 1,193 1,366 15%
Bikes with an engine capacity of more than 350cc 2,323 2,804 21%
*Source- IRDA

As per the law, all the new two-wheeler owners must have a long-term plan for 3-5 years. Well, the IRDAI has also not revised the long-term two-wheeler insurance premium rates since FY 2019, but this time, there is a hike in the premium rates for two-wheelers.

In the two-wheeler category, the long-term third-party insurance premium rates for less than 75CC bikes have a hike of 178%, which is the highest till now. For 75 to 150CC, there is a hike in the premium of 17%. The two-wheelers fall into the category of 150 to 350CC, there is a hike of 35% in the premium rates. And a 16% increment for the two-wheelers with more than 350CC engine capacity.

Below we have given a table showing the changes in premium rates for the Financial Year 2022-23 in long-term insurance plans-

Long-term Third-party Premium Hike for Two-wheelers in India

Bikes With Engine Capacity Premium Rates (FY 2019-20) in Rupees Premium Rates (FY 2022-23) in Rupees Change (In Percentage)
Bikes with an engine capacity of less than 75cc 1,045 2,901 178%
Bikes with an engine capacity between 75cc and 150cc 3,285 3,851 17%
Bikes with an engine capacity between 150cc and 350cc 5,453 7,365 35%
Bikes with an engine capacity of more than 350cc 13,034 15,117 16%
*Source- IRDA

Summarising

In India, as a two-wheeler owner, it is mandatory to have at least third-party two-wheeler insurance. To get the best deal with best customer support, you must buy online two-wheeler insurance. Online two-wheeler insurance gives you the best deals with extra benefits, and also it is a convenient mode. In this article, we have discussed all the updated third-party insurance premiums announced by IRDAI. Therefore, if you want to buy or renew your third-party two-insurance policy, the increased premium prices are effective from 1st April 2022.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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^The renewal of insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for a transaction may vary subject to additional data requirements and operational processes.

^The buying of Insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for transaction may vary subject to additional data requirements and operational processes.

#Savings are based on the comparison between highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*TP price for less than 75 CC two-wheelers. All savings are provided by insurers as per IRDAI-approved insurance plan. Standard T&C apply.

*Rs 538/- per annum is the price for third party motor insurance for two wheelers of not more than 75cc (non-commercial and non-electric)

#Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*₹ 1.5 is the Comprehensive premium for a 2015 TVS XL Super 70cc, MH02(Mumbai) RTO with an IDV of ₹5,895 and NCB at 50%.

*Rs 457/- per annum (1.3/day) is the price for the third-party motor insurance for private electric two-wheelers of not more than 3KW (non-commercial). Premium is payable on an annual basis