Third party motor insurance premium for both cars and two wheelers will increase from June 1, 2022, the Ministry of Road Transport and Highways (MoRTH) has announced.
Earlier, TP rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI). This is the first time that the MoRTH has notified the TP rates in consultation with the insurance regulator.
What Is Third-Party Insurance (TP)?
The third-party insurance cover is for other than own damage, and is mandatory along with the own damage cover that a vehicle owner has to purchase. This insurance cover is for any collateral damage to a third party.
So, if you have a car or a two wheeler, including an electric vehicle, but not hybrid electric vehicle, then the insurance cost for you is set to increase due to this decision by MoRTH.
Read below to find out exactly how much of an impact it will have on your costs.
MoRTH has notified Base Premium for Third Party insurance for unlimited liability. It has also decided to give discount on Premium for Third Party insurance for certain classes of vehicles. pic.twitter.com/NQcrLwqRPk— MORTHINDIA (@MORTHIndia) May 26, 2022
Cars: Every car has an engine of certain cubic centimetres capacity. For example, if your car has a 1,000 cc or 1 litre engine, then it means that 1,000 cubic centimetres of air-petrol mixture it can displace. Read below to find out the new rates for third insurance on cars:
1,000 cc (1 litre): The premium for third-party (TP) insurance was Rs 2,072 in FY 2019-2020. It will now be Rs 2,094.
1,000 cc to 1,500 cc (1 to 1.5 litre): The older premium for TP insurance was Rs 3,221. Now, it will be Rs 3,416.
Above 1,500cc: There is a drop in premium for TP insurance by Rs7. It was earlier Rs 7,897; now it is Rs 7,890.
Since the BS6 emission norms, most manufacturers have stopped manufacturing small capacity diesel engines, and now the only available diesels in BS6 are bigger than 1.5 litres in volume or more. Click here to read more about it.
Two Wheelers: Two wheelers are also charged different rates according to their engine capacity. The rates have been revised as follows.
150 cc to 350 cc: The new premium rate will be Rs 1,366.
Above 350 cc: The new premium rate will be Rs 2,804.
Electric Vehicles: Electric vehicle run on electric motors, and not on internal combustion engines. Hence, instead of measuring them in cc or litres, they are measured in kilowatt (KW).
The MoRTH has now allowed a discount of 15 per cent on electric vehicles and 7.5 per cent on the insurance premium for hybrid electric vehicles. Recently, Honda launched the City Hybrid in India; click here to read more on that.
Here are the TP premiums for EVs:
Up To 30KW: Premium for TP insurance will be Rs 1,780.
30KW to 65KW: Premium for TP insurance will be Rs 2,904.
Additional inputs from PTI