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Monday, March 31, 2014

Third Party Car Insurance rates hiked.

The revision of the motor third party premium rates are out and will be in effect from 1st April 2014. Earlier Insurance Regulatory and Development Authority (IRDA) had proposed to increase the premium by up to 137 percent. However the recent revised rates released by IRDA shows a marginal addition of around 9-20 percent (depending on vehicle type) to the existing third party premium rates.

The private car category will see an increase of around 19-20 percent while the two-wheeler category will be increased by 9-10 percent. For hired vehicles with four or more wheels and carrying capacity exceeding the number of passengers and three-wheeled passenger vehicles on hire with capacity exceeding 17, IRDA has not changed the current rates. For the taxi segment (four-wheelers for carrying passengers, on hire), a rise of 19-20 per cent was announced. For auto-rickshaws (three-wheeled vehicles carrying not more than six passengers), a 10 per cent rise in motor third-party premium was announced.

The table below will explain the increase applicable to you as per your vehicle specification (Private vehicles)
2013 (premium)
2014 (premium)
Private cars (not exceeding 1000 cc)
Private cars ( exceeding 1000 cc, but not exceeding 1500 cc)
Private cars (exceeding 1500 cc)
Two Wheelers (not exceeding 75 cc)
Two Wheelers (exceeding 75 cc but not exceeding 150 cc)
Two Wheelers (exceeding 150 cc but not exceeding 350 cc)
Two Wheelers (exceeding 350 cc)
*source - IRDA

The motor insurance segment consists of two parts – the optional own damage cover and the mandatory third party cover. Third party motor insurance is mandatory for vehicles plying on Indian roads. The third party insurance cover claims from third party arising out of accidents and damage incurred by the third party.
While no hike in existing rate is good news, the people of India can rejoice the fact that the hike is marginal and nowhere close to the proposed increase of up to 137 percent.

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