Considering purchase of new car or two-wheeler, you are in for a trouble as these vehicles will get pricier beginning September 1, 2018. And this is because after the Supreme Court's directive insurance companies with effect from the specified date will only be issuing long- term third party covers for new automobile purchase.
The leading news daily highlights that beginning this Saturday, for new car purchases you will be securing a three-year policy while for the two-wheeler five year third-party insurance will be offered.
The longer-tenure third-party cover has been proposed as only a small percentage of these car or two-wheeler owners renew their policy in subsequent years. Also, this shall be benefit to car or two-wheeler buyers in the sense as the premium outgo for a longer tenure will be at a lesser cost as in the otherwise scenario, premium amount increases every year for third-party cover.
It is also to be noted that the order of providing or extending longer tenure insurance cover for new vehicle purchases applies only to the third party cover and not to the comprehensive cover.
Third-party cover premiums are decided every year by the insurance regulator, IRDAI and insurance companies have to adhere to such rates.