Third-party motor insurance rates likely to increase from this date

Third-party motor insurance rates are likely to increase from April 1 as the Ministry of Road Transport has proposed a hike in the same for various categories of vehicles.

If the proposal is accepted by the relevant stakeholders, then insurance premiums could see an increase of up to 23% from the next financial year (2022-23).

The last change in the premium was done in 2019, but after the Covid-19 hit India in 2020, premiums have not been revised since then.  

According to the proposed revised rates, private cars with 1,000 cubic capacity (cc) will attract rates of Rs 2,094 compared to Rs 2,072 in 2019-20.

While private cars with 1,000 cc to 1,500 cc will attract rates of Rs 3,416 compared to Rs 3,221.

Two-wheelers with 150 cc and less than 350 cc engines, will attract a premium of Rs 1,366. Whereas, two-wheelers with over 350 cc engine, will attract a premium of Rs 2,804.

However, a discount of 15% is proposed for electric private cars, electric two-wheelers, electric goods carrying commercial Vehicles and electric passenger-carrying Vehicles.  

Every year, the third-party insurance premium rates are revised by the Insurance Regulatory and Development Authority of India (IRDAI). But this time, the Ministry of Road Transport will notify the third party rates in consultation with the insurance regulator. 

Third-party insurance

Third-party insurance is mandated by law and covers damage to others in a road accident alongside cover for own damage.