Third party motor insurance premium rates will increase (upto 68%) from 25th April’2011

Insurance Regulatory and Development Authority (IRDA) released the new premium rate structure for third party motor insurance. The new rates that will be effective from April 25 are expected to impact the commercial transporters more than private individuals.

The third party premium portion for private four wheelers and two wheelers will rise 10 per cent and for goods-carrying or commercial vehicles almost 68 per cent.

 

Private Cars	Existing Premium (23.01.2007 Noun.)	Revised Premium
Not exceeding 1000 cc	670	740
Exceeding 1000 cc but not exceeding 1500 cc	800	880
Exceeding 1500 cc	2500	2750

 

Two Wheelers	Existing Premium (23.01.2007 Noun.)	Revised Premium
Not Exceeding 75 cc	300	330
Exceeding 75 cc but not exceeding 150 cc	300	330
Exceeding 150 cc but not exceeding 350 cc	300	330
Exceeding 350 cc	620	660

IRDA has also fixed a formula for revising the motor insurance premium rates, which would be done after taking into account inflation and data on claim settlement.

The insurance companies had actually sought a 150 per cent hike in premium rates as these companies are bleeding on account of high claim to premium cost. However, IRDA in its exposure draft had suggested a 10 per cent increase in premium for private cars and two-wheelers and up to 80 per cent for goods carriers. Though regulation of the tariffs in the non-life sector was withdrawn in 2007, third-party motor insurance continues to be regulated.

As per Motor Vehicle Act – It is mandatory to for a vehicle owner to obtain third-party insurance to provide insurance cover to others in case of injury or loss of life.

Please find complete revised schedule of premium here.