The Ministry of Road Transport and Highways (MoRTH) has recently increased the third-party motor insurance premium for various categories of vehicles with effect from June 1, a decision likely to raise the insurance cost of cars as well as two-wheelers.
The insurance premiums have been raised after a gap of two years. The rates for fiscal 21 and 22 were not revised and the rates laid down for fiscal 20 were continued during these two years.
Earlier, TP rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI). This is the first time that the MoRTH has notified the TP rates in consultation with the insurance regulator.
The insurance premiums were calculated by keeping in mind these figures: data provided by the insurance information bureau of India (IIBI), claimed paid data for accident years starting from 2012 to 2021 and gross written premiums for the fiscal years 2012 to 2021.
For electric vehicles, a discount of 15 percent was proposed for private cars, electric two wheelers, electric goods carrying commercial vehicles and electric passenger carrying vehicles. A discount of 7.5 percent on Motor TP premium rates for Hybrid Electric Vehicles is proposed. This will be an incentive to use environment friendly vehicles.
Premium for cars & two-wheelers
The insurance premium for cars has been raised to ₹2,094 for cars with less than 1,000 cc and for higher engine cars with capacity between 1,000 and 1,500 cc, premium has been raised to ₹3,416. The highest TP insurance premium for cars with greater than 1,500 cc will be ₹7,897.
For two wheelers, insurance premium will stay in the range of ₹538 and ₹2,804 depending on the vehicle’s engine size.
For private cars:
| Type private car | Third party premium (Rs) |
| < 1000 cc | 2,094 |
| between 1,000-1,500 cc | 3,416 |
| >1,500 cc | 7,897 |
For two-wheelers:
| Two wheelers | Third party premium (Rs) |
| <75cc | 538 |
| 75-150 cc | 714 |
| 150-350 cc | 1,366 |
| >350cc | 2,804 |
For new cars
| New private Car | Three-year single premium (Rs) |
| <1,000 cc | 6,521 |
| 1,000 cc to 1,500 cc | 10,640 |
| >1,500 cc | 24,596 |
For new two-wheelers
| New two-wheeler | Five-year single premium (Rs) |
| <75 cc | 2,901 |
| 75-150 cc | 3,851 |
| 150 cc- 350 cc | 7,365 |
| >350 cc | 15,117 |
For Electric cars
| Cars | Third party premium (Rs) |
| <30 kw | 1,780 |
| 30kw to 65 kw | 2,904 |
| >65kw | 6,712 |
For electric two-wheelers
| Two wheelers | Third party premium (Rs) |
| <3KW | 457 |
| 3KW-7KW | 607 |
| 7KW to 16KW | 1,161 |
| >16KW | 2,383 |
New vehicles
For a new private car, the insurance premium for three years has been kept in the range of ₹6,521 and ₹24,596 based on the car’s engine capacity. For two wheelers, five-year single premium will range between ₹2,901 and ₹15,117.
For electric cars, the insurance premium will be anywhere between ₹1,780 and ₹6,711. For electric two wheelers, the premium will be anywhere between ₹457 and ₹2,383.
Commenting on the revised rates notified by the MoRTH, All India Motor Transport Congress (AIMTC) president Kultaran Singh Atwal said, PTI reported, it is a unanimous view of the road transport fraternity of India that the increase in third-party premium for goods and passenger commercial vehicles is uncalled for.