Third-Party Motor Insurance Premium To Cost More From June 1
From June 1, 2022, two-wheelers will see the maximum increase across plans while electric vehicle insurance premium will get cut.
India’s insurance regulator has approved a hike in third-party motor insurance premiums after two years for most vehicles, including electric vehicles. Payouts for low-cost scooters and motorcycles will jump the most.
Two-wheelers will see the maximum increase across plans, with the long-term payout rising 178%, according to data from the Ministry for Road Transport and Highways.
The revised premium rates are applicable from June 1, according to a March 17 notification issued by the Ministry of Road Transport and Highways. As of now, the pricing prescribed in June 2019 is applicable.
The increase is a positive step for the industry since there has been no hike for a long time, Sanjay Datta, head of underwriting and claims at ICICI Lombard General Insurance Co. Ltd., had told BQ Prime in March. He expected it to be "fair to all stakeholders".
The new revised private vehicle premium renewal rates:
New Vehicles To Become Pricier
Mandatory third-party vehicle insurance on purchase of new vehicles was introduced in 2018 for fiscal 2019, but the rates for multi-year plans (usually 3-5 years) have not been revised since then.
The insurance regulator has now hiked long-term premiums for both new two- and four-wheeler categories.
Long-term premium rates for new two-wheelers of less than 75 cc will see the steepest rise at 178%, while premium rates for scooters and motorcycles between 75-150 cc will rise 17%. For bigger motorbikes of 150-350 cc, the increase is steeper at 35%.
In the four-wheeler category, the small car segment of less than 1,000 cc is the most affected. Customers will have to shell out 23% more for a motor-third party cover at the time of buying the vehicle after June 1.
Discounts For EVs
To push the use of environment-friendly vehicles, the notification has slashed prices for electric and hybrid electric vehicles:
A 15% discounted premium rate for electric cars, two-wheelers, goods-carrying commercial vehicles and passenger carrying vehicles for renewal premiums as well as on long-term rates for new electric private vehicles.
Electric private cars are classified into three categories corresponding to the regular private car categories: not exceeding 30 KW, exceeding 30 KW but not exceeding 65 KW; and exceeding 65 KW.
Electric two-wheelers are classified into four categories corresponding to the regular two-wheeler categories: not exceeding 3 KW; exceeding 3 KW but not exceeding 7 KW; exceeding 7 KW but not exceeding 16 KW; and exceeding 16 KW.
A discount of 7.5% is available for hybrid electric vehicles.