India, Mumbai (March 10, 2013)
Car insurance rate is all geared up to get costlier. The IRDA has agreed to 20 per cent increase in rates for third party cover starting from April 1. This is taking into consideration growing inflation and claim settlement history.
According to a notification by Insurance Regulatory Development Authority (IRDA), „the overall percentage increase in the motor third party portfolio works out to 18.9 per cent. The above rates will be effective from April 1, 2013.“
The third party insurance cover premium rates will go up for all commercial vehicles, two-wheelers, and passenger cars as per this notification by IRDA. For all passenger cars within 1000 cc engine capacity, the latest revised premium rate for third party cover is proposed to be raised by about 20 per cent. This will now cost about 941 INR per year. On the other hand, for two-wheelers exceeding engine capacity of 350 cc, the insurance premium rate would rise by 18.30 per cent. This will amount to 804 INR.
IRDA has increased Car Insurance Rate but exempted three-wheelers (carrying passengers for hire) from this hike. The four-wheelers utilized for carrying passengers on hire with carrying capacity over six passengers will experience an increase of about 20 per cent as per the notification.
A similar hike was announced last year in March 2012. However, the decision did not work out well initially. The hike invited a lot of agitation among members of transporters‘ association. The association fought a legal battle against IRDA and general insurers. The battle started in the Calcutta High Court. It went on for over eight months and finally the court had passed verdict against the transporter’s association.
In the year 2012, IRDA has assured general insurers about a hike in third party car insurance rate gradually. It has also asked for capital to be set aside to pay the future claims. IRDA also mentioned that it takes many years to settle claims under against the third party motor category.
The car insurance pool has been dismantled by the Insurance Regulatory and Development Authority from April 1, 2011. This has resulted in close connection between car insurance premium rate and current market rate.
Consumers can use Car Insurance Quote to get affordable rates for their vehicles online.
About Author:
I am renowned Insurance Agent, presently working for the venerated survey company for the contribution of Facts & Figures for the reports & statistics. Previously, I have been active member for many government schemes concerning Auto Insurance in India.