The government has announced an increase in the third-party motor insurance premium for various categories from June 1. The revised rates are expected to increase insurance cost of cars and two-wheelers. This is the first time that MoRTH has notified the third party rates in consultation with Insurance Regulatory and Development Authority of India (IRDAI).
According to the Ministry of Road Transport and Highways (MoRTH), private cars with an engine capacity of 1,000 cc will incur rates of Rs 2,094 compared to Rs 2,072 in 2019-20, which is when the rates were last revised. The rates were kept unchanged due to the COVID-19 pandemic.
Rates for private cars with engine capacity between 1,000 cc and 1,500 cc will be increased from Rs 3,221 to Rs 3,416. However, rates for cars above 1,500 cc will see a drop in premium from Rs 7,897 to Rs 7,890.
Two-wheeler owners will also have to pay Rs 1,366 premium for bikes of 150 cc but not exceeding 350 cc, and Rs 2,804 for over 350 cc.
The ministry stated that a discount of 7.5 per cent on the premium will be allowed for hybrid electric vehicles. While electric private cars not exceeding 30KW will attract a premium of Rs 1,780, those exceeding 30 KW but not 65 KW will attract a premium of Rs 2,904.
This insurance cover is for any collateral damage to a third party, generally, a human being, caused due to a road accident. The third party insurance is mandatory along with the own damage cover that’s required to be purchased.
Educational institution buses will be allowed a discount of 15 per cent. The ministry also allowed a 50 per cent discount on the premium for private cars registered as vintage cars.
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