Increase in third-party insurance premium for cars, two-wheelers for FY 2020-21 proposed by IRDAI

The IRDAI has proposed a substantial hike in the third-party insurance premium for cars, two-wheelers and transport vehicles for the financial year 2020-21. However, a discount of 15% is proposed for electric private cars, electric two wheelers, electric goods carrying commercial vehicles and electric passenger carrying vehicles. In addition to that, a discount of 7.5% on motor third party premium rates for hybrid electric vehicles is also proposed. The regulator has proposed to increase the Motor Third Party (TP) premium rates for cars with engines below 1000 cc to Rs 2,182 from the existing Rs 2,072 for fiscal 2020-21. Similarly, for cars between 1,000 cc and 1,500 cc the third-party premium is proposed to be increased to Rs 3,383 from the existing Rs 3,221. However, for luxury cars (with engine capacity of over 1,500 cc) no change in third party premium has been proposed from the existing Rs 7,890.40. The IRDAI has proposed to increase the TP premium rates for two-wheelers with engines below 75 cc to Rs 506 from the existing Rs 482 for fiscal 2020-21. Similarly, for two-wheelers between 75 cc and 150 cc, the premium is proposed to be increased to Rs 769 from the existing Rs 752. For two-wheelers between 150 cc and 350 cc the premium is being proposed to be increased to Rs 1,301 from the existing Rs 1,193. For two-wheelers with engines above 350 cc, the premium is proposed to be increased to Rs 2,571 from the existing Rs 2, 323 for fiscal 2020-21.