The Insurance regulator — Insurance Regulatory and Development Authority of India (IRDAI) — has proposed to raise the third-party premium rates for private two-wheelers and cars for the financial year 2022-23, Mint reported.
As the new rates come into force starting April 1, 2022, policy holders will have to shell out more for private cars and two-wheeler vehicle's third party cover.
It is noteworthy to mention that the IRDAI has not revised the rates in the past two financial years fiscal 2021 and 2022. So, the rates continue to be the same which IRDAI laid down for fiscal 2019-20, wrote Mint.
“This was an expected move as third-party rates were not changed for the past two terms. The increase is from car to two-wheeler to commercial vehicles across the spectrum. While third-party premium rates are revised annually by IRDAI, these were put on hold in 2020, and again in 2021 to give relief to policyholders during the pandemic,” says Ashwini Dubey, head-motor renewals, Policybazaar.com.
However, as the number of third-party claims rose after the initial drop during Covid period, general insurance companies wrote to IRDAI, proposing the mandatory increase in third-party rates, which has now been accepted. This will increase insurance premiums for both comprehensive and third-party as TP is a part of comprehensive.
“Since TP insurance is mandatory by law, this will impact all customers. Customers who wish to avoid a premium increase can renew their policies before the new rates become effective on 1 April 2022,” said Dubey.
The highest percentage increase of around 21 percent will be for two-wheelers with engine capacities above 350cc. The proposed rates are being hiked from ₹2,323 to ₹2,804. Two-wheelers with engine capacity over 150cc but not exceeding 350cc will have to pay ₹1,366, up from ₹1,193.
The rate has been reduced for two-wheelers with engine capacity exceeding 75cc but not exceeding 150cc; they will have to pay ₹714 instead of ₹752. Two-wheelers with an engine capacity of less than 75cc, the cost of third-party cover has been increased from ₹482 to ₹538. At the same time, the rates have been increased across all segments for cars or four-wheelers.
The proposal also entails 15 per cent discount for electric private cars, electric two wheelers, electric goods carrying commercial vehicles and electric passenger carrying vehicles. The proposed discount is expected to incentivise usage of environmentally friendly vehicles. Electric private cars will attract a premium of ₹1,780 to ₹6,712 depending on their capacity expressed in kilowatts. Similarly, two-wheeler electric vehicles will attract premiums in the range of ₹457 to ₹2,383.