Car & Two-wheeler Insurance Premiums To Rise From June 1. Here's Why
The premiums for mandatory third party Insurance cover on cars and two wheelers is expected to rise from June 1st 2022.
If the surging fuel and food prices along with expected telecom rate hikes weren¡¯t enough, here¡¯s another expense ready to dig your pockets deeper: insurance premium on cars and two-wheelers is expected to rise from June 1, 2022.
On May 25, the Ministry of Road Transport and Highways increased the third-party motor insurance premium for various categories of vehicles with effect from June 1, as per a PTI report.
For the uninitiated, 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.
This insurance cover is for any collateral damage to a third party--generally a human being--caused due to a road accident.
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The Revised Rates
According to the revised rates notified by the ministry, private cars with an engine capacity of 1,000 cc will attract rates of ?2,094 compared to ?2,072 in 2019-20.
Similarly, private cars with an engine capacity between 1,000 cc and 1,500 cc will attract rates of ?3,416 compared to ?3,221.
Two-wheelers over 150 cc but not exceeding 350 cc will attract a premium of ?1,366 and for two-wheelers over 350 cc the revised premium will be ?2,804, as per the PTI report.
But there¡¯s some relief too. According to the Ministry¡¯s notification, 7.5% discount on the premium shall be allowed for hybrid electric vehicles. Also, owners of private cars above 1,500 cc will see a drop in premium from ?7,897 to ?7,890.
If you are planning to take an electric car, note that electric private cars not exceeding 30KW will attract a premium of ?1,780, those exceeding 30 KW but not 65 KW will attract a premium of ?2,904.
Also Read: Frequently (Not) Asked Questions - Is It Worth Taking A Loan To Buy A Car?
Hike In Premium For Commercial Vehicles Too
The premium for goods carrying commercial vehicles exceeding 12,000 kg but not 20,000 kg will increase to ?35,313 from ?33,414 in 2019-20.
In the case of goods carrying commercial vehicles exceeding 40,000 kg, the premium will increase to ?44,242 as against ?41,561 in 2019-20.
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Rates Hiked After Two-year Moratorium Amid Covid
After a two-year moratorium due to the COVID-19 pandemic, the revised third-party insurance premium will come into effect from June 1. Earlier, The rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI). This is the first time that the Ministry of Road Transport and Highways has notified the third party insurance rates in consultation with the insurance regulator.
Also Read: Factors That Affect Your Life Insurance Policy Premium
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