IRDAI has proposed a revision for mandatory third-party cover premium. And a hike to the tune of around 15% is sought for cars with engine capacity up to 1500 cc and in case of two-wheelers, the hike can be 4-21%. For private cars with engine below 1000 cc, the third-party motor insurance premium is likely to increase to 2,120 from the existing 1,850. For private cars with engine capacity of 1000-1500 cc, it is likely to go up to 3,300 from 2,863.
For passenger vehicles with engine capacity over 1500 cc, there shall be no hike in the motor insurance premium. Similarly, for two-wheelers with engine capacity over 350 cc, there will be no premium price revision. For two-wheelers up to 75 cc, it has proposed to increase the rate to 482 from 427; for above 75-150cc to 752 from 720; for above 150- 350 cc to 1,193 from 985. There will be no changes in the rate for two-wheelers with engine capacity above 350 cc.
Furthermore, to incentivize the use of electric vehicles, there has been a proposal made to offer a 15% discount on motor insurance bought for such vehicles.
Every year IRDAI notifies the change in third-party insurance rates by March end but this year it has come out with a draft plan and has indeed sought comments from stakeholders.
It is to be noted that the insurance regulatory body has not come out with any changes in the long term premium i.e. 3 years for new cars and 5 years in case of new 2-wheelers.