There will be no change in the annual premium for motor third-party insurance cover for the new financial year, the Insurance and Regulatory Development Authority of India (Irdai) has said.
According to market participants, the move is expected to provide relief to policyholders as every year premiums for third-party cover are increased by 10-30%.“It is hereby notified that by virtue of powers vested in the Authority under Section 14 (2) (l of IRDA Act, 1999, the Irdai hereby extends the validity of premium rates set out in the aforementioned order beyond March 31, 2019, until further notice. In other words, insurers shall continue to charge the rates currently being charged for Motor Third Party Liability lnsurance Cover from April 1, 2019, until further orders,” Irdai said it its order.
Motor insurance comprises two types — own damage and third-party. Third-party is mandatory, with premium being fixed by the regulator on an annual basis. Insurers, on the other hand, fix their own rates for own damage and personal accident (CPA) cover. Last fical, it was announced that a new vehicle should mandatorily have three-year car insurance and five-year bike insurance for third-party liabilities. Irdai had earlier asked insurers to provide a minimum cover of Rs 15 lakh under CPA for owner-driver vehicles at a premium of `750 per annum for annual policies for both cars and two-wheelers. Insurers had an option to offer higher covers in multiples of `1 lakh or `5 lakh too, but the minimum has to be Rs 15 lakh.
“This will come as some relief to policyholders as we are expecting rates to be higher by at least 15-20% for this fiscal. But we have to see whether the regulator raises the rates in the months to come,” a private sector non-life insurance company official said.