On notification, the new rates will come into force from April 1
Third-party motor insurance premium for cars, two-wheelers, good carriers, buses, including school buses, and a host of other automobiles looks set to increase, sharply for some, with the Insurance Regulatory and Development Authority of India (IRDAI) proposing an increase in the rates for 2020-21.
Among private cars, those above 1500 cc or luxury cars is the only sub-segment where the rate of premium is proposed to be kept unchanged, at ₹7,890.
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For cars below 1000 cc, a segment popular with those migrating from two-wheelers to cars and comprising the popular Alto model, the premium rate proposed is ₹2,182 or an increase of 5.3% from the existing rate of ₹2,072. The rate proposed for 1000-1500 cc cars is ₹3,383 (₹3,221) or an increase in excess of 5%.
With GST, the cost of purchasing the mandatory, TP motor cover will be still higher.
Unlike in 2019-20 when it maintained the rate of premium to be paid for bikes above 350cc, the regulator has proposed an increase for all two-wheelers. The rates proposed are: Below 75cc – ₹506 (₹482); 75-150cc – ₹769 (₹752); 150-350cc – ₹1,301 (₹1,193). For bikes with engine capacity of over 350cc, the premium is proposed to be increased to ₹2,571 (₹2,323).
According to the draft, TP cover rates for two-wheelers below 75 cc is proposed at ₹506, up from the existing ₹482. Hike has also been proposed for those between 75 cc and 350 cc. The hike in bikes with engine capacity exceeding 350 cc has been proposed at ₹ 2,571 from ₹2,323.
The increase in the premium proposed for public goods carriers (other than three-wheelers), depending on the Gross Vehicle Weight, ranges from ₹346 to ₹2,896. For private goods carriers, the hike proposed, again depending on their GVW, is from ₹169 to ₹498.
For school buses, IRDAI has proposed to increase the basic rate of premium from the existing ₹13,874 to ₹14,338. This apart, the other component, which is the premium levied per licensed passenger or the number of seats, will increase to ₹876 (₹848). For other buses, the basic rate proposed is ₹14,978 (₹14,494) and ₹916 (₹886) per licensed passenger.
In the exposure draft issued on Thursday, which will be open for comments till March 20, IRDAI said a discount of 15% is proposed for electric private cars, electric two wheeler, electric goods carrying commercial vehicles and electric passenger carrying vehicles. The proposed discount will incentivise usage of environmental-friendly vehicles.
A discount of 7.5% on the Motor TP premium rates has been proposed for hybrid electric vehicles. This again is to act as an incentive to use environment-friendly vehicles. On notification, the new rates will come into force from April 1.
It said this even while proposing an increase in the rates for several electric vehicles.
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