Car insurance price for four wheeler and two wheeler owners are likely to be increased from June 1 this year.
The speculation comes as the ministry of road transport and highways (MoRTH) will increase the third-party motor insurance premium for various categories of vehicles with effect from June 1, it said in a notification.
The decision is likely to jack up the cost of cars and two-wheelers, causing another reason to worry for vehicle owners in India who are already having to shell out around Rs 100 for a litre of petrol.
According to the revised insurance rates notified by the road transport ministry on Wednesday, May 26, private cars with an engine capacity of 1,000 cc will have to pay insurance rates of Rs 2,094 compared to Rs 2,072 in 2019-20.
On the other hand, private cars with an engine capacity between 1,000 cc and 1,500 cc will attract car insurance rates of Rs 3,416 compared to Rs 3,221.
Meanwhile owners of cars above 1,500 cc will have to pay a premium of Rs 7,897, as per the notification.
Two-wheelers over 150 cc but within 350 cc will attract a premium of Rs 1,366 and for over 350 cc, the revised premium will be Rs 2,804.
After a two-year moratorium due to the COVID-19 pandemic, the revised third-party (TP) insurance premium will come into effect from June 1, as per a report by PTI.
Before this, third party insurance rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI).
This is the first time that the road transport ministry has released the third party insurance rates in consultation with the insurance regulator.
According to the ministry’s notification, a discount of 7.5 per cent on the premium shall be allowed for hybrid electric vehicles.
While electric private cars not exceeding 30KW will attract a premium of Rs 1,780, those exceeding 30 KW but not 65 KW will attract a premium of Rs 2,904.
The premium for goods carrying commercial vehicles exceeding 12,000 kg but not 20,000 kg will increase to Rs 35,313 from Rs 33,414 in 2019-20.
In the case of goods carrying commercial vehicles exceeding 40,000 kg, the premium will increase to Rs 44,242 against Rs 41,561 in 2019-20.
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.
As per the notification, a discount of 15 per cent has been provided for educational institution buses. “A discounted price of 50 per cent of the premium has been allowed to a private car registered as Vintage Car,” it said.
The car insurance premium hike comes at a time when India is already battling rising inflation, and citizens are having to shell out more cash to buy everyday products, while auto fuel prices have also increased.