IRDAI proposes to hike third-party motor insurance premiums for FY2022-23
2 min read . Updated: 07 Mar 2022, 08:32 AM IST
Premium- From the past two financial years (FY 2020-21 and FY 2021-22), the IRDAI had not revised the rates. Hence, till now, the rates remained the same that Irdai laid down for FY 2019-20.
The Insurance Regulatory and Development Authority of India (IRDAI) has proposed the third party premium rates for private two-wheelers and cars for the financial year 2022-23. According to the new rates, you will have to pay more for your four-wheeler (private cars) and two-wheeler (bike) vehicle's third-party cover with effect from 1 April 2022.
From the past two financial years (FY 2020-21 and FY 2021-22), the IRDAI had not revised the rates. Hence, till now, the rates remained the same that Irdai laid down for FY 2019-20.
Ashwini Dubey, head- motor renewals, Policybazaar.com, said that this was an expected move as third party rates had not been 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. However, with the rise in the number of third-party claims after the initial drop during Covid, GICs had written 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% 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. However, 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. On the other hand, the rates have been increased across all segments for cars or four-wheelers.
According to the IRDAI draft proposal, third-party premium rates have been increased for private cars. For cars with an engine capacity of less than 1000cc, the cost of third-party cover has been increased from ₹2,072 to ₹2,094, for private cars with engine capacity exceeding 1000cc but not exceeding 1500cc from ₹3,221 to ₹3,416. For cars with an engine capacity of more than 1500cc, the cost of third-party cover has been increased from ₹7,890 to ₹7,897.
