Good news! Motor third-party insurance premium to remain same till further notice
There is some good news for the car and two-wheeler owners as far as the insurance premium of their vehicles is concerned. Insurance Regulatory Authority of India (IRDAI) has issued Order dated 27th March 2020 that the Motor Third Party Liability Insurance Cover premium rate for the year 2019-20 will stand extended beyond 31st March 2020 until further notice. Therefore, all insurers will continue to charge the premium rates currently being charged for Motor Third Party Liability Insurance Cover from 1st April 2020 onwards until further orders.
At the start of the financial year, the new third-party (TP) rates are declared by IRDAI for different categories of the vehicles. Earlier in the month, the IRDAI had released the draft proposal for new rates effective 2020-21. However, after the recent directive, the TP rate for 2020-21 will remain the same as 2019-20.
For the private car segment, the regulator has proposed to keep the TP the premium rate constant only for the cars that have an engine with capacity exceeding 1500 cc. For cars with engine capacity of less than 1,000 cc, the TP rate would have gone up from Rs 2072 to Rs 2182, while for those cars where the engine capacity is exceeding 1000cc but below 1500cc, the rate would have gone up to Rs 3383 instead of the current rate of Rs 3221. Now, there will no change and the rates remain the same.
For the two-wheeler category, the premium rate will remain Rs 482 for the two-wheelers not exceeding 75 cc engine. For the two-wheelers exceeding 75 cc and below 150 cc, the current rate of Rs 752 will continue for 2020-21 till further notice. Similarly, for the two-wheelers exceeding 150 cc and below 350 cc, the current rate of Rs 1193 and for the two-wheelers exceeding 350 cc, the rate will remain as the current rate of Rs 2323.
Till lockdown continues, one should ensure that the renewal of car insurance and bike insurance can be done online. It’s better to keep them renewed even while your vehicle is parked in the parking space.
Third-party Insurance (TP) and Own Damage (OD) Insurance are the two major components in a motor insurance policy. According to the The Motor Vehicles Act, 1988, it is compulsory to insure one’s vehicle with TP insurance cover before plying your vehicle. Importantly, its only the third-party premium which is is set by IRDAI each year, the OD premium may differ across insurance companies.