Motor insurance premium to be costly by up to 20% from April 1

Motor insurance premium is set to become more expensive, with IRDA allowing up to 20% increase in third party rates from April 1 in view of rising inflation and the history of claim settlement.

"The overall percentage increase in the motor third party portfolio works out to 18.9%. The above rates will be effective from April 1, 2013," IRDA said in a notification.

Charges for the third party insurance cover as per the notification will go up for two-wheelers, passenger cars and commercial vehicles.

For passenger cars not exceeding engine capacity of 1,000 cc, the revised third party premium is proposed to be hiked by 20% to Rs 941 per annum. For two-wheelers exceeding 350 cc, the premium would go up by 18.30% to Rs 804.

For goods carrying vehicles, excluding three-wheelers, with carriage capacity exceeding 40,000 kg, the premium would be Rs 15,035 per annum.

There is no increase in case of three-wheelers used for carrying passengers for hire or reward with carrying capacity not exceeding 6 passengers.

In case of four-wheelers used for carrying passengers with carrying capacity exceeding 6 passengers for hire, the increase is to the extent of 20% from the existing level.

Source - BS.com