The union government has proposed a hike in third-party motor insurance premium for various categories of vehicles from next fiscal, according to a draft notification by road transport ministry. Vehicle Insurance: Govt proposes hike in motor insurance premium. Details.
The ministry, based on consultation with insurance regulator IRDAI, has placed, the draft to prescribe base premium for third party motor insurance premium in public domain for suggestions. The deadline to submit any objections and suggestions is 14 March. A discount of 15% is proposed for electric private cars, electric two wheelers, electric goods carrying commercial vehicles and electric passenger carrying vehicles.
The proposed discount will incentivise usage of environmentally friendly vehicles, the draft notification said. As for the vintage cars segment, there is no substantial data relating to the past experience. A discounted price of 50% of the proposed rate based on the erstwhile Indian Motor Tariff (IMT) has been proposed for those private cars identified as vintage cars by the vintage and classic car club of India.
Further, a discount of 7.5% on Motor TP premium rates for hybrid electric vehicles is proposed. This will be an incentive to use environment friendly vehicles, the draft report said. 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.
Similarly, private cars with 1,000 cc to 1,500 cc will attract rates of Rs 3,416 compared to Rs 3,221, while owners of car above 1,500cc will see a premium of Rs 7,897 compared to Rs 7,890. Two-wheelers over 150 cc but not exceeding 350 cc will attract a premium of Rs 1,366 and for two-wheelers over 350 cc the revised premium will be Rs 2,804.
While electric private cars (not exceeding 30KW) will attract a premium of Rs 1,780, for electric private cars (exceeding 30 KW but not exceeding 65 KW) premium will be Rs 2,904. The premium for goods carrying commercial vehicles (exceeding 12,000 kg but not exceeding 20,000 kg) would increase to Rs 35,313 from Rs 33,414 in 2019-20.
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Similarly, in case goods carrying commercial vehicles ( exceeding 40,000 kg), the premium will increase to Rs 44,242 compared to Rs 41,561 in 2019-20. The third party insurance cover is for other than own damage and is mandatory along with the own damage cover that a vehicle owner has to purchase.
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