As of now, the rates are proposals by IRDAI, while the final notification of the TP rates will happen at the beginning of the new financial year.
For some car owners, the premium towards insurance may go up while for two-wheeler owners, the hike in premium could be for all segments. The Insurance Regulatory Authority of India (IRDAI) has released a draft on the new Motor Third Party (TP) Liability rates for the financial year 2020-21. The new TP rates are revised each year by IRDA and since 2011, they are released at the start of the financial year. The rates are declared for different categories of the vehicles. As of now, the rates are proposals by IRDAI, while the final notification of the TP rates will happen at the beginning of the new financial year.
For the private car segment, the regulator has proposed to keep the TP premium rate constant only for cars that have an engine with a capacity exceeding 1500 cc. For cars with engine capacity of less than 1,000 cc, the TP rate may go up from Rs 2072 to Rs 2182, while for those cars where the engine capacity is exceeding 1000cc but below 1500cc, the rate may go to Rs 3383 instead of the current rate of Rs 3221.
For the two-wheeler category, the premium rate is proposed to be increased across the segment. The premium on two-wheelers not exceeding 75 cc engine may be increased from Rs 482 to rate of Rs 506. For the two-wheelers exceeding 75 cc and below 150 cc, the current rate of Rs 752 may be increased to Rs 769. Similarly, for the two-wheelers exceeding 150 cc and below 350 cc, the current rate of Rs 1193 may be increased to Rs 1301 and for the two-wheelers exceeding 350 cc, the new rate may be Rs 2571 instead of the current rate of Rs 2323.
The two major components in a motor insurance policy are – Third-party Insurance (TP) and Own Damage (OD) Insurance. As per The Motor Vehicles Act, 1988, it is compulsory to insure one’s vehicle with TP insurance cover before plying the vehicle on the roads. Only the TP premium is set by IRDAI each year while the OD premium may vary across insurance companies.
The Motor TP premium rate chart (Proposed for Financial Year 2020-21)