Premium rates for vehicle liability insurance will increase for two-wheelers and passenger cars, except for two-wheelers with a cylinder capacity greater than 75 cc but not exceeding 150 cc, as well as for both – electric wheels whose motor capacity is greater than 3 KW but does not exceed 7 KW. In the last two categories, there will be rate reductions.
Industry watchers and analysts said the premium rate hikes, made after a gap of around three years due to Covid, are more or less in line with forecasts. Premium rates for vehicle liability insurance will increase from June 1.
“Rates have been increased in line with industry expectations. There was a draft notification for upward revisions to premium rates. So we had a very good idea of what the final order could be. This is a cumulative increase, but not a big increase,” Sanjay Datta, head of underwriting, claims and reinsurance, ICICI Lombard General Insurance, told FE.
In particular, the insurance regulator Irdai (Insurance Regulatory and Development Authority) published in March a draft notification of revision of premium rates for motor third-party liability insurance. The revision of third-party tariffs is initiated annually by Irdai. However, the activity has been suspended due to the Covid.
“It is a good thing that after three years the new premium rates for motor third party liability insurance have appeared. It is a positive thing for general insurers. During the pandemic, many vehicles were not circulating, so it was not a good idea to raise the rates at that time,” said TA Ramalingam, Technical Manager, Bajaj Allianz General Insurance.
“The premium discounts offered for education vehicles, electric vehicles and hybrid electric vehicles are good measures,” Ramalingam told FE.
The Ministry of Road Transport and Highways (MoRTH), in consultation with Irdai, has published the Motor Vehicles (Third Party Insurance Basic Premium and Liability) Rules, 2022 in notices dated 25th May . A 15% discount on premiums is granted to educational establishments. the buses. A discount of around 15% and 7.5% on the premium is allowed for electric and hybrid vehicles, respectively.
Since the process of upward revisions to premium rates was put on hold due to Covid-19, a sharp revision was expected amid rising loss ratios after the initial drop seen during the pandemic, Abhilasha Singh said. , Manager – Partnerships, Riskcovry.
The increase in third party (TP) premium rates will increase insurance premiums for comprehensive policies as well as third party policies, since TP insurance is a compulsory part of all motor policies in India, Singh added. .
According to a notification in the Official Gazette dated May 25 from the MoRTH, the annual third party liability insurance rate for passenger cars of up to 1,000cc engine capacity has been increased to Rs 2,094 in 2022-23 from Rs 2 072 in 2019-20. Private cars above 1,000cc up to 1,500cc will attract rates of Rs 3,416 from Rs 3,221, while owners of cars over 1,500cc will see a premium increase from Rs 7,890 to Rs 7,897.
Two-wheelers over 150cc but not exceeding 350cc will attract a premium of Rs 1,366, up from Rs 1,193 in 2019-20, while two-wheelers exceeding 75cc but not exceeding 150cc will attract a premium of Rs 714 against Rs 752 earlier.
Premium rates for private electric cars with a battery capacity above 30 KW but not exceeding 65 KW have been increased from Rs 2,738 in 2019-20 to Rs 2,904 in 2022-23. Electric two-wheelers with a battery capacity above 7KW but not exceeding 16KW will now have a liability rate of Rs 1,161 compared to Rs 1,014 in 2019-20. Premium rates for electric two-wheelers with a battery capacity above 3 KW but not exceeding 7 KW have however been reduced to Rs 607 from Rs 639 in 2019-20.