- No hike in third party vehicle insurance for FY2020-21
- Insurers to continue charging the current rates
The Insurance Regulatory and Development Authority of India (IRDAI) has issued a new order dated 27 March 2020. It states that the validity of premium rates for Motor Third Party Liability Insurance Cover set out for the year 2019-20 stands extended beyond 31 March 2020 until further notice. From 1 April 2020 onwards, the insurers will continue to charge the rates currently being charged for motor third party liability insurance cover. The decision is expected to bring some relief to the citizens who are affected by the coronavirus lockdown.
Earlier, in an exposure draft issued by IRDAI on 5 March 2020, the regulators had proposed a substantial hike in third party motor insurance premium for financial year 2020-21. Under the proposal, third-party insurance for cars with engines below 1,000cc was expected to cost Rs 2,182 for fiscal 2020-21 from the existing Rs 2,072. As for cars with engine between 1,000cc and 1,500cc, the third-party premium was proposed to be increased to Rs 3,383 from the existing Rs 3,221. The proposal, however, excluded hike in premium rates for luxury cars with engine capacity of over 1,500cc. At present, the third party premium rate for luxury cars is Rs 7,890.
In view of the current coronavirus pandemic, IRDAI has withheld the above-mentioned proposed hike in third party motor insurance premium, until further notice.
