From June 1, the cost of third-party Motor insurance will increase

The Ministry of Road Transport and Highways (MoRTH) increased the third-party (TP) motor insurance premium for various categories of vehicles on May 25, with effect from June 1, a move that is expected to raise the cost of cars and two-wheeler insurance.

According to the new prices announced by the MoRTH, private cars with a 1,000 cc engine will be charged $2,094 instead of $2,072 in 2019-20.

Similarly, private cars with engines ranging from 1,000 to 1,500 cc will pay $3,416 instead of $3,221, while cars with engines larger than 1,500 ccs would pay $7,897 instead of $7,890.

New Third Party Insurance rates

Two-wheelers with a displacement of more than 150 cc but less than 350 cc will be charged a premium of $1,366; two-wheelers with a displacement of more than 350 cc will be charged a revised premium of $2,804.

The revised TP insurance premium will take effect on June 1 after a two-year hiatus owing to the COVID-19 pandemic. The Insurance Regulatory and Development Authority of India had previously announced TP rates (IRDAI). The MoRTH has notified the TP prices for the first time in consultation with the insurance regulator.

According to the Ministry’s announcement, hybrid electric vehicles would be eligible for a 7.5 percent premium reduction. While electric private automobiles with less than 30 KW will be charged a premium of 1,780, those with more than 30 KW but less than 65 KW will be charged a premium of 2,904.

In 2019-20, the premium for goods-carrying commercial vehicles weighing more than 12,000 kg but less than 20,000 kg will rise to 35,313 from 33,414 in the previous year. The premium for goods-carrying commercial vehicles weighing more than 40,000 kg will rise to 44,242 from 41,561 in 2019-20. 

Other than own damage, third-party insurance is required in addition to the own damage coverage that a car owner must obtain. This insurance covers any collateral damage caused by a road collision to a third party, usually a human individual.

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