Third party premium for cars raised by 12 per cent

Chennai: The insurance regulator has increased the motor third party premiums of private cars by around 12 per cent, less than what it had proposed in the draft. The new premiums will take effect from June 16.

Premium for private cars not exceeding 1,000 cc has been increased to Rs 2,072 from Rs 1,850 last year, a hike of 12 per cent. The Insurance Regulatory and Development Authority of India (Irdai) had earlier proposed a hike of 14.6 per cent to Rs 2,120.

For cars between 1,000 cc and 1,500 cc, the premium is up 12.5 per cent to Rs 3,221, lower than the proposed premium of Rs 3,300. The premium for cars exceeding 1,500 cc will remain at Rs 7,890 as proposed earlier.

Similarly, the TP premium of two-wheelers of less than 75 cc has been raised by 12.8 per cent to Rs 482 from Rs 427. For two-wheelers not exceeding 150 cc, premium will go up by 4.4 per cent to Rs 752 and those below 350 cc by 21 per cent to Rs 1,193. However, no rate hike has been proposed for superbikes or those exceeding 350 cc. The proposed rates of two-wheelers have been retain-ed by Irdai even after sta-keholders consultations.

The long term policy premiums—three-year for private cars and five-year for two-wheelers ---have been retained without any change.

“The New TP rates have been quite customer-centric and keeping in mind the developments in the automobile industry. The rates for long-term policies for new private vehicles have been kept the same. While this is a positive move for the private car industry which is going through a demand stress period, the insurance industry shall have challenge in terms of higher loss ratios due to inflation and claim cost,” said Gurneesh Khurana, President and Business Head – Motor, Bajaj Allianz General Insurance.

Two new categories have been introduced. In these, the premiums of electric vehicles are about 15 per cent lower than those of traditional fuel vehicles. The other one is the category of Quadricycle in the private car segment, where the rates have been kept at par with the traditional fuel vehicles to provide a boost to this new emerging segment.

The regulator has also distinguished between school buses and other buses. For school buses the premium has increased by 5 per cent and for other buses the premium has been raised by 10 per cent.