Third party car insurance: Latest rates, key benefits and rules

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Updated: September 28, 2018 11:21:24 AM

IRDAI has made the long-term insurance cover for new cars and two-wheelers mandatory. Here's all you need to know about long-term third party car insurance.

Third party car insurance, Third party bike insurance, long term third party car insurance, third party car insurance online, third party car insurance price, Latest rates, key benefits, rules, precautionsLong term third party car and bike insurance: The owner of vehicles would be benefited by having fixed premium rates for a long time.

1st September 2018 saw the implementation of long-term third-party liability-only policies of three years for cars and five years for bikes. The ruling of the Supreme Court and its implementation by IRDAI through its circular have helped in creating a completely and totally beneficial scenario for all the parties involved. The government would be benefited with having more insurance-compliant vehicles running on the roads. That too right from the day when they hit the streets and for a longer period of time. The insurers would, in turn, have a lower lapsation ratio as the policy issued will be for a long term. The owner of vehicles would be benefited by having fixed premium rates for a long time. They would also be liberated from their duty of timely yearly renewals. It is, thus, a win-win situation for all the parties involved.

“The only thorn in the customer’s side would be a high outflow of premiums right at the start of buying a vehicle. That is not all. The customers who go for a vehicle with a larger engine will pay more vice versa those who buy a vehicle with smaller engines, be it a car or a bike,” says Devendra Rane, Founder & CTO,

The premiums rates for long-term third-party liability-only car and bike policies can be instantly glanced at in the below table:

Car Engine Capacity

Current 1 Year Plan (Rs)

New Long-Term Plan (Rs)


Not exceeding 1000 cc




Between 1000 cc and 1500 cc




Higher than 1500 cc





Bike Engine Capacity

Current 1 Year Plan (Rs)

New Long-Term Plan (Rs)


Not exceeding 75 cc




Between 75 cc and 150 cc




Between 150 cc and 350 cc




Higher than 350 cc




The higher third-party premiums rates will in turn also raise the premium rates for comprehensive plans. In short, the total premium outflow will see a significant increase.

A word of caution for the new vehicle owners, however, would be not to blindly accept what is put forward to them by the vehicle dealer. “The vehicle dealers might try to corner vehicle owners into accepting motor insurance policies from them only. They might lead owners into misinterpreting the apex court ruling and IRDAI guidelines and in turn create a monopolistic market for themselves. A probable reason which might entice the dealers in indulging into such practice could be higher commissions and monetary benefits offered by certain insurers,” says Rane.

You should, therefore, always compare various plans to find out whether the plan offered is the best one or there are even better and pocket-friendly options available in the open market. You must log on to online portals and compare the insurance quotes offered by the vehicle dealer with other similar plans being offered by various insurers. You should thoroughly evaluate the options and the add-ons available with the base plan.

You should then buy a plan which is a perfect balance of all-around coverage and pocket friendliness. Taking a well-informed decision is your right and you should not let others influence you into blindly accepting what is being offered.

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