Irdai proposes up to 50% hike in motor insurance premium

New Delhi: India’s insurance regulator has proposed up to 50% increase in insurance premium for cars, motorcycles as well commercial vehicles from 1 April. However, there is no proposal to increase the third-party motor insurance premium for small cars (up to 1,000cc) from Rs2,055 currently.

The Insurance Regulatory and Development Authority of India (Irdai) has released exposure draft on premium rates for motor third-party insurance covers for FY18 and invited stakeholders comments till 18 March.

ALSO READ | Insurance sold by car dealers can be costly

The hike proposed in mid-segment cars (1,000-1,500 cc) as well as bigger cars and SUVs is 50%. The proposal is to increase premium to Rs3,355 for cars up to 1,000 cc and Rs9,246 for bigger ones. Also, no change has been proposed for two-wheelers with engines of capacity up to 75 cc. However, for sportsbikes and superbikes (more than 350 cc), Irdai proposes to increase the premium to Rs1,194 from the present Rs796, up 50%. Increase has also been proposed for entry level bikes (77-150 cc) and performance category (150-350 cc).

For commercial vehicles, Irdai has proposed an up to 50% hike in premium rates for different categories of CVs. Tractors rated at up to 6 HP can now attract Rs765 insurance premium, up from Rs510. Irdai has also planned to increase premium rates for e-rickshaws.

ALSO READ | Is it preferable to buy a multi-year insurance policy for two-wheelers?

Vintage cars, however, will attract lower premium rates as the Irdai has proposed a 25% discount in premium rates. A car is certified as vintage car by Vintage and Classic Car Club of India.

Motor third-party insurance is mandatory for vehicles. The rates are revised each financial year. Irdai said the proposed premiums for the next fiscal have been calculated on the accident-related data from 2011-12 to 2015-16 provided by the Insurance Information Bureau of India (IIBI).

ALSO READ | How to buy a used car with no regrets