The Insurance Regulatory and Development Authority of India (IRDA) which is a national agency of the Government of India said that people who own cars, commercial vehicles and two-wheelers will now have to shell out more towards paying their insurance as they have increased the premiums for third-party covers with effect from April 2012.
Third-party insurance cover protects the vehicle owner from any financial liability, in case of damage to life or property in an accident to the third person.
According to the notice by the insurance regulator, the premium rates for third party motor insurance will rise by about 40 per cent from April 1, 2012.
Previously, IRDA had said that the new rates of third party motor insurance premium would be revised at the end of every financial year.
For those who own private cars or two-wheelers, the hike in the premium rate is only about 4-8% as compared to those who own commercial vehicles as they have to pay a higher premium rate of upto 32%.
Those who own cars up to 1000 cc engine capacity have to pay Rs 784 while premiums for cars with engine capacity of above 1000 cc and up to 1500 cc will be required to pay Rs 925. For cars that are exceeding 1500 cc, it will be Rs 2853.
IRDA said that, during this year, there has been no change in the frequency of claims. However, there is an upward trend in court awards, wages and inflation.
However, the regulator has asked the insurers not to cancel the present insurance policies and fresh policies to effect new premium rates.