IRDAI notifies new 3rd party motor cover rates

Insurance regulator IRDAI has notified motor third party insurance premium rates for 2018-19, changes bound to cheer those having small cars, leave big bike owners disappointed and probably result in protests by goods transporters.

As proposed in the exposure draft, which it issued earlier this month, the Insurance Regulatory and Development Authority of India has notified a premium of ₹1,850 for private cars not exceeding 1,000 cc. This is a nearly 10% reduction compared to the existing rate of ₹2,055.

For other categories of private cars, it has decided to maintain the existing rates – ₹2,863 for 1,000cc to 1,500cc; and ₹7,890 for cars exceeding 1,500 cc. Third party insurance is mandatory under law for motor vehicles and the regulator revises the premium rates every year. The new rates come into force on April 1.

The other aspect of motor insurance – own damage cover – is decided by the insurers and varies between companies.

According to the notification, issued on Wednesday, the IRDAI has decided to increase the 3rd party cover for two-wheelers to ₹985 from the existing ₹887 for those in the 150 cc to 350 cc segment. It is a relatively higher increase for two-wheelers exceeding 350 cc from the ₹1,019 at present to ₹2,323.

The premium for two-wheelers up to 75 cc, however, is being reduced to ₹427 (₹569), while there is no change, from ₹720, for those in 75cc to 150 cc segment.

In the goods carrying vehicles public carriers (other than 3-wheelers), the regulator has increased the premium for vehicles with GVW from 7,500 kgs. onwards to those exceeding 40,000 kg. The increase is over 25% for some, while for those with GVW not exceeding 7,500 kgs. it has been maintained at ₹14,390.

For goods carrying vehicles private carriers (other than 3-wheelers) the rates are a combination of a reduction, retention and increase. As regards four-wheeled hire vehicles (cabs) for carrying not more than 6 passengers, the regulator has reduced the basic TP premium rate as well as the premium per licensed passenger.

Three-wheeled vehicles (autorickshaws) with carrying capacity upto 6 passengers need to pay more for obtaining the third party cover with the IRDAI effecting an increase in both basic TP premium rate and the premium per licensed passenger.

In the order on the new rates, the regulator also advised insurance companies to ensure that the motor 3rd party liability insurance is made available at their underwriting offices and through all available channels of distribution.