Third-party motor insurance premium rates are set to go up in the current financial year. Though new premium rates generally come into effect from April 1 every year, the Insurance Regulatory and Development Authority of India (IRDAI) had allowed last year’s rates to continue till now.
The draft notification released by the IRDAI on Monday proposes to increase the premium rates for mandatory third-party cover by about 15 per cent for cars, while the hike in premium varies for other categories of vehicles.
The premium for cars below 1,000 cc will increase to ₹2,120 from the existing ₹1,850, an increase of 14.5 per cent.
In the case of cars between 1,000 cc and 1,500 cc, the premium being proposed to be increased is ₹3,300, from the existing ₹2,863.
However, no change has been mooted for luxury cars (with engine capacity of more than 1,500 cc) from the existing ₹7,890.
The new premium proposed for two-wheelers below 75 cc is ₹482 (from ₹427), while there will be no hike for bikes exceeding 350 cc.
No change has been suggested in the single premium for a three-year policy for new cars and five-year policy for new two-wheelers.
The regulator has offered a special discount of 15 per cent in the premium for electric private cars and electric two-wheelers, while no hike is planned in the premium for e-rickshaws.
Premium for other categories of vehicles, such as taxis, buses, trucks and tractors is also proposed to be increased at varying rates. The regulator has sought comments from stakeholders before May 29. It is likely to make the new rates applicable from June 1, 2019, sources said.