The Insurance Regulatory and Development Authority of India (IRDAI) has proposed a hike in third party motor insurance premium for several categories of private cars, two-wheelers and heavy vehicles for the year 2020-21.
For private cars between 1000 cc and 1500 cc engine capacity, the third party premium will rise from Rs 3,221 to Rs 3,383. In case of two-wheelers between 75 cc and 150 cc engine capacity, the premium will rise from Rs 752 to Rs 769.
For three-year single premium for new private cars between 1000 cc and 1500 cc capacity, the rate has gone up from Rs 9,534 to Rs 10,149. The five-year single premium for two-wheelers between 75 cc and 150 cc has gone up from Rs 3,285 to Rs 3,845.
Every year, the regulator decides the third party insurance premium that remains the same across all the insurers. The premium is evaluated considering the annual claims data of all insurers across different cubic/engine capacity of the vehicle. Under a motor insurance policy, there are two major components: Third-party insurance and Own Damage Insurance. As per The Motor Vehicles Act, 1988, it is mandatory to insure vehicles with at least third-party insurance cover.
IRDAI said the data provided by the Insurance Information Bureau of India was used or arriving at the motor TP premium rates. “The claims paid data in respect of each of the accident years starting from the year 2011-12 up to2018-19 has been considered,” it said.