[jailbird_fynix]

Third-party insurance prices hike up to 21% for 2-wheelers and 12% for 4-wheelers





The Insurance Regulatory and Development Authority of India (IRDAI) has approved the increase in premium of third-party motor insurance for this fiscal. The rates usually change in April. However, the authority is implementing these changes from June 16 for FY20.

As per the order, the third party insurance premium for private cars with -

• less than 1,000 cc will be Rs 2,072, up from Rs 1,850.
  
• And for those exceeding 1,000 cc upto 1,500cc, will be Rs 3,222 as against Rs 2,863 earlier.
  
• For cars with engine capacity exceeding 1,500 cc, it will remain at Rs 7,890.

For two-wheelers also, the third party insurance premium for those with -

• less than 75 cc engine capacity has been increased to Rs 482 from Rs 427.
  
• With engines exceeding 75 cc upto 150 cc will attract premium of Rs 752 as against Rs 720 earlier.
  
• For those exceeding 150 cc upto 350 cc the premium will go up to Rs 1,193 from Rs 985.
  
• The insurance regulator has kept unchanged premium on two-wheelers exceeding 350 cc engine capacity at Rs 2,323.

Federation of Automobile Dealers Associations (FADA) said the hike in third-party motor insurance premiums for FY20 will further hit vehicle sales, which have already been witnessing a prolonged slump. "This sudden change in price hike of third party insurance will again dent the pace of sales, specially the 2W category which is already reeling under price hike for mandatory 5 years insurance and ABS/CBD implementation.This increase would significantly impact sales volumes."

Sources -
ET Auto
ET Auto 2

[AnInternetUser]

The % increase is steep but the absolute amounts aren't that much if I'm honest. We need better insurance checking mechanisms. My friend's pre-owned C-Class was rear-ended but he couldn't claim insurance because it was still in the previous owner's name (which is completely his fault).

The other day a rickshaw smashed my car's door, mirror, and fender. When I asked him to come to the police station so this matter can be settled amicably he said he can't because he had no license, registration and insurance. My insurance company took care of it but it was a steep expense (34k on a Honda Brio).

I know the prices must've been hiked for a different reason, but while the increased rates might help the insurance companies keep up with the changing statistics of accidents and whatnot, a lot of that goes to waste if people have no valid insurance in the first place.

Just my opinion on this. Curious to see what everyone else feels about this.

P.S. apologies in case this is slightly off-topic.

[PraNeel]

This increase is to compensate for the high amount of third party claims being filed in courts, cross subsidy for commercial vehicles, increased minimum compensation due to court orders or it might be something else. One thing is for sure it is going to be a higher dent on pocket.
What is more worrying is it is an increasing trend. No wonder cars are considered a luxury item in our country!!

[jailbird_fynix]

Update: New third-party insurance premium rates for Electric Vehicles -



The premium rates are at a 15 percent discount compared to rates for general private cars of similar categories.

Link

[kimmig]

Utter BS .. just another way to fleece customers. Getting a TP claim from the MAIT is notoriously difficult, then what are we paying for?? This is a scam the cartel of insurance cos are pulling off in collusion with the IRDA.

[dhanushs]

For a moment I was like damn. Not again. I have 6 vehicles in the above 1500cc segment and a huge chunk is paid every year only to keep the papers up to date. Some of the vehicles don’t even run 500kms a year. But, Looks like the 1500cc plus segment isn’t affected.

In any case, the increase in cost should be justified by increase in the ease of paperwork and claim settlement.

[GTO]

Originally Posted by kimmig

This is a scam the cartel of insurance cos are pulling off in collusion with the IRDA.

I am inclined to agree. Because 3rd-party coverage is mandatory and there is no differentiator, the insurance companies are milking it for all they can. As AnInternetUser posted, this time around, the hit isn't that much, but it is yet another indicator of how freely 3rd-party insurance premiums are exploited. Here is an excellent related thread (General Insurance Companies collect more 3rd-party premiums than that for comprehensive coverage).

[tsk1979]

Originally Posted by GTO

I am inclined to agree. Because 3rd-party coverage is mandatory and there is no differentiator, the insurance companies are milking it for all they can. As AnInternetUser posted, this time around, the hit isn't that much, but it is yet another indicator of how freely 3rd-party insurance premiums are exploited. Here is an excellent related thread (General Insurance Companies collect more 3rd-party premiums than that for comprehensive coverage).

Not only is it a SCAM, but actually a subsidy being given to trucker lobby. If third party claim premium was by "Accidents" trucking industry would need to pay extremely high premiums. However, rarely in case of personal transport does hefty third party premiums come into play.

But truckers are a strong lobby, so they are being subsidized at the cost of car owners

[sgiitk]

@GTO; if they confirm that higher insurance will not be used to cross-subsidize TP then I am still Ok. Otherwise I have an issue. Is there any statement on this account. CVs are insured on TP and they claim all sorts of stuff. As it is truckers are cribbing.