The cost of insurance for four-wheeler and two-wheeler owners is set to rise starting June 1 this year. The speculation comes as the ministry of road transport and highways (MoRTH) announced in a notification that the third-party motor insurance price for certain kinds of vehicles will increase with effect from June 1. The decision is likely to raise the cost of vehicles and two-wheelers, giving vehicle owners in India yet more reason to be concerned. A litre of petrol costs roughly Rs 100 in India.
According to the increased insurance rates announced by the road transport ministry on Wednesday, May 26, private cars with a 1,000cc engine would pay Rs 2,094 in insurance, up from Rs 2,072 in 2019-20. Private cars with engines ranging from 1,000 to 1,500 cc, on the other hand, will pay Rs 3,416 for car insurance, compared to Rs 3,221. According to the notification, car owners with engines larger than 1,500 cc will have to pay a premium of Rs 7,897.
Two-wheelers over 150 cc but within 350 cc will attract a premium of Rs 1,366 and for over 350 cc, the revised premium will be Rs 2,804.
After a two-year moratorium due to the COVID-19 pandemic, the revised third-party (TP) insurance premium will come into effect from June 1, as per a report by PTI. Before this, third party insurance rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI). This is the first time that the road transport ministry has released the third party insurance rates in consultation with the insurance regulator.
According to the ministry’s notification, a discount of 7.5 per cent on the premium shall 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.
The premium for goods carrying commercial vehicles exceeding 12,000 kg but not 20,000 kg will increase to Rs 35,313 from Rs 33,414 in 2019-20. In the case of goods carrying commercial vehicles exceeding 40,000 kg, the premium will increase to Rs 44,242 against Rs 41,561 in 2019-20.
The third-party insurance cover is for other than own damage and is mandatory along with the own damage cover that a vehicle owner has to purchase. This insurance cover is for any collateral damage to a third party, generally, a human being, caused due to a road accident.
As per the notification, a discount of 15 per cent has been provided for educational institution buses. “A discounted price of 50 per cent of the premium has been allowed to a private car registered as Vintage Car,” it said.
The car insurance premium hike comes at a time when India is already battling rising inflation, and citizens are having to shell out more cash to buy everyday products, while auto fuel prices have also increased.