Third party motor insurance may further hit Auto sector

Insurance regulator IRDAI’s proposal to increase third party (TP) motor insurance from 10 to 20% on different segment will come into effect. This is likely to hit auto sector badly as it is already reeling under impact of slow down and fuel hike, said experts, adding that the hike is being opposed by transporters’ association citing various reasons.

Usually, third party motor insurance rates are declared from April 1st of every financial year, but this year it was not in effect due to Lok Sabha elections, but now it will be implemented.

Reacting over this IRDAI proposal, GirishVagh, Head, commercial vehicles, Tata Motors, said, “The slowdown in auto sector has come due to several reasons and insurance is one minor fact. In commercial vehicles, our customer buy vehicles for business after witnessing that their operate economics is better, and they will have profit after paying EMI on monthly basis and see if freight is available.”