Third-party motor insurance premiums to go up by up to 65 pc

Third-party motor insurance premiums to go up by up to 65 pc

The premiums are being revised after a gap of four years, the sector watchdog Insurance Regulatory and Development Authority (IRDA) said, adding, from now onwards the third-party motor insurance premium rates would be revised annually.

The 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. These rates are currently regulated by the Tariff Advisory Committee of the IRDA.

As such owners having third-party cover for private cars of 1,000-cc capacity would now have to pay premiums of Rs 740, those exceeding 1,000 cc but below 1,500 cc will attract premium of Rs 880 and those above 1,500 cc at Rs 2,750.

"If the premium rates get revised annually on specified parameters it will save a lot of time which gets wasted on account of negotiation with several associations," National Insurance Company CMD N S R Chandraprasad said.

The third-party cover for two-wheelers of up to 350 cc capacity would attract premium of Rs 330 and those exceeding 350 cc would cost of Rs 680. 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 Though regulation of the tariffs in the non-life sector was withdrawn in 2007, third-party motor insurance continues to be regulated.

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.