The move follows the government's approval of a draft proposal that aimed to hike third-party insurance cover. The move comes into effect from June 1.
Just when we thought that the worst was over with the fuel price hikes, here comes news of a steep hike in insurance costs on vehicles. Vehicle insurance premiums are slated to increase from next Wednesday (June 1, 2022) following the government’s acceptance of a proposal to hike third-party motor insurance premiums.
A draft proposal to hike such premiums was submitted by the Ministry of Surface Transport and received requisite clearances thereafter. As per the information available, the premiums could go up by as much as 20% for passenger cars and two-wheelers, burning a further hole in the pockets that has already been impacted by high petrol and diesel prices.
Companies hadn’t revised insurance premiums for the past couple of years on the grounds that they did not want to pressure the purses already affected by the Covid-19 led lockdowns. The last revision was done in 2019-20 and the reason for this rather substantial increase could be that it has come after a long time.
Such revisions are usually carried out each year by the Insurance Regulatory and Development Authority of India. The current increase would get passed on to the vehicle owners as third-party premiums are mandated under the law. The insurance covers damage to others in case of a road accident.
A quick look at the data made available by an insurance agency to our team indicates that the lowest increase of one per cent is for passenger cars below 1000 CC, while in the case of two wheelers between 75 and 150 CC the premium has actually been reduced by five per cent.
The highest increase of 21 percent is in the case of two wheelers in the above 350-CC segment whereas for higher end passenger cars, the hike is six per cent. For two-wheelers between 150 and 350 CC, the proposed insurance premium is 15 percent higher than the earlier figure.
Here is a list of proposed insurance premiums for select vehicles:
|Cars below 1000-CC||Rs.2094|
|Cars between 1000 – 1500 CC||Rs.3416|
|Two-wheelers below 75 CC||Rs.538|
|Two-wheelers between 75-150 CC||Rs.714|
|Two-wheelers between 150-350 CC||Rs.1366|
|Two-wheelers above 350 CC||Rs.2804|
However, the government has once again kept electric two-wheelers out of the ambit of this increase. In fact, it has proposed to reduce the insurance premiums for electric cars and electric two-wheelers by as much as 15 per cent. It also proposed a 7.5 per cent cut in insurance premiums for hybrid vehicles.