Vehicle insurance premiums to increase from June 1 – here’s how much the new premiums will cost you
- Insurance premiums are increasing from June 1st, after a draft proposal by the government proposed hikes in third-party cover was notified.
- Now that the proposal has been passed, vehicle owners have to shell out up to 21% more for third-party insurance.
- Insurance premium rates are usually revised annually, but the government had frozen rate hikes for two years.
AdvertisementVehicle insurance premiums are all set to increase from June 1st, after the government’s proposal was accepted by the relevant stakeholders. According to the now-approved proposal by the Ministry of Road Transport, third-party motor insurance premiums have seen an increase of up to 21%, making it more expensive than ever to insure your car or two-wheeler.
Insurance premiums have not been revised for two years, since the onset of the COVID-19 pandemic. The last revision was done in 2019-20, and this could be the justification behind the relatively steep hike proposed by the ministry.
It is worth noting that third-party insurance premium rates are revised by the Insurance Regulatory and Development Authority of India (IRDAI) every year.
Third-party insurance is mandated by law, which means the increase in insurance premium will be passed on to vehicle owners. Third-party insurance covers damage to others in a road accident, and is mandatory alongside cover for own damage.
However, if you want to avoid this, you can renew your vehicle insurance policy before June 1, 2022.
Interestingly enough, there is a 5% decrease in the premium for two wheelers with an engine capacity of 75-150cc. Premiums for private cars above the 1,500cc capacity also see a nominal increase of ₹7.
Proposed third-party insurance premium rates from 2022-23:
|Particulars||Old rate||New rate||Change|
|Two wheelers <75cc||₹482||₹538||12%|
|Two wheelers 75-150cc||₹752||₹714||-5%|
|Two wheelers 150-350cc||₹1,193||₹1,366||15%|
|Two wheelers >350cc||₹2,323||₹2,804||21%|
Source: Insurance Regulatory and Development Authority of India
Government proposes a discount of 15% for electric vehicles
In order to further incentivise electric vehicle sales, the government has also proposed a discount of 15% on the premiums for electric cars and two wheelers.
Apart from this, a 7.5% discount has been proposed for hybrid electric vehicles.
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