Increased third party insurance premium to impact motor vehicles owners

The Insurance Regulatory and Development Authority of India's decision to revise Third Party (TP) insurance premium rates for Motor vehicles for the current financial year 2019-20 will finally be implemented from June 16, 2019. According to Zee Business TV report, the enhanced annual TP insurance premium will impact private car owners having small cars of 1000 cc and above range, along with those having two-wheelers in the range of 75cc to 350cc. 

The report said the IRDA's decision led to the hike of Third Party premium rates from 12% to 21%, and it will benefit the general insurance companies like ICICI Lombard, GIC Insurance and New India Assurance. The ICICI Lombard's Third Party insurance income is stated to comprise about 30% contribution, while GIC Insurance and New India Assurance will also be benefitted as TP insurance form a sizable chunk of their income. 

According to the report, after June 16, small private cars upto 1000 cc, which so far paid Rs 1850, will have to pay enhanced premium of Rs 2072; private cars from 1000 cc upto 1500 cc earlier paid Rs 2863, but will now pay Rs 3221; while private cars above 1500 cc are not affected, as they paid annual premium of Rs 7890, and will also pay the same amount in future.

कार, टू-व्हीलर्स के लिए थर्ड पार्टी इंश्योरेंस 16 जून से होगा महंगा.. जानिए महंगे प्रीमियम से किन कंपनियों को होगा फायदा?@poojat_0211 pic.twitter.com/qc9eLgH09L

— Zee Business (@ZeeBusiness) June 7, 2019

Two wheelers, including bullet and other two-wheeler vehicles, wil also bear the burden of enhanced annual TP insurance premium, said the report, adding that two wheelers upto 75cc so far paid Rs 427, but will now pay Rs 482; two wheelers from 75cc to 150cc will now pay enhanced amount of Rs 752 from earlier premium of Rs 720; and bikes between 150cc and 350cc so far paid Rs 985, but will pay enhanced amount of Rs 1193.

However, there is no change in insurance premium of bikes over 350cc as the earlier amount was also the same, the report added.