Proposed Third party Premium revision in Motor Policies

As we have seen recently, IRDAI has been increasing the Third Party premium on the Motor Policies regularly every year. This year, the same notice was expected in the month of March and April but the announcement has been delayed. Finally, IRDAI has put up the proposal on their website through a draft circular on 20th May, 2019. These rates shall be applicable from the date of commencement for the Financial Year 2019-2020 which IRDAI shall announce shortly.

The new rates for Third Party premium is derived based on the data analysis of:

  • Paid Claims
  • Cumulative Paid Claims
  • Burning Cost
  • Loading it with appropriate expenses

The Premium has been revised for all the Vehicle classes but we are discussing about Private Car and Two-wheelers only. Please find below the table to understand the range of Cubic Capacity for which the prices have been increased:

Vehicle Type Existing Rates (2018-19) Proposed Rates (2019-20)
PRIVATE CAR
Not exceeding '1000 cc 1850 2120
Exceeding 1000 cc but not exceeding 1500 cc 2863 3300
 
Two-Wheelers
Not exceeding 75 cc 427 482
Exceeding 75 cc but not exceeding 150 cc 720 752
Exceeding '150 cc but not exceeding 350 cc 985 1193

Only great news as per this new circular is that there has been no revision of rates in Long-term policies' third party premium.

IRDAI has invited all the stakeholders to provide their feedbacks and comments on this exposure draft on or before 29th May, 2019 post which the Circular with Final revised Third Party rates shall be published with the date of commencement.

Be ready to shelve out few more bucks from your pocket while purchasing a new car or renewing your existing Car Insurance Policy.

Best of Luck on your purchase of Car Insurance Policy!

 
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