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The Insurance Regulatory and Development Authority of India (IRDAI) issued a statement saying that third party motor insurance rate will remain unchanged for the financial year 2020. This comes as a relief for vehicle owners who have faced a 10% to 40% hike in premium every April, except for last year where a 10% to 20% drop on small capacity cars was enforced.
The Supreme Court made long-term third party insurance compulsory for three years for cars and five years for two wheelers. This has led to a rise in premium rates. In fact, rates were increased multiple times over 2018. The increase resulted in slow vehicle sales from October. This could be the single big reason for the decision to keep the insurance rates the same. The Insurance Regulatory and Development Authority of India sets only Third-Party Insurance premiums and allows for insurers to fix their own rates for a fully comprehensive insurance and personal accidental cover.
The premium rates (financial year 2020) for privately owned cars under 1000cc will stay at Rs 1850, car between 1000cc and 1500cc will carry a premium of Rs 2863, and cars above 1500cc will carry a premium of Rs 7890. For all two wheel machines, 75cc and below will carry a premium of Rs 427, vehicles between 75cc and 150cc will carry a premium of Rs 720, bikes between 150cc and 350cc carry a premium of Rs 985. All bikes above the 350cc mark will carry a premium of Rs 2323.
Some big insurance houses offering third-party insurance in India are Bajaj Allianz, Bharati AXA, HDFC Ergo, IFFCO Tokio, and New India Assurance.
What We Think Of No Change In Third Party Premium
Good move, but most people buy comprehensive insurance today. Maybe the IRDAI could do something about these premiums instead of just third-party.