For financial year 2020-21, 10 to 20 % increase in premium for third party motor insurance was proposed. But due to COVID-19 this was not implemented.
It is a huge relief for those who are purchasing a new car this year. Insurance companies will not increase the rate in third party motor insurance. According to information received through sources, this will be for the second consecutive term that there will be no increase in third party motor insurance. The direct benefit will be for those who are about to buy a new car, scooter or any vehicle or are about to renew their motor insurance.
Last year too Bima premium was not increased
Actually last year insurance regulator IRDAI had asked for proposed rates from bima companies. For financial year 2020-21, 10 to 20 % increase in premium for third party motor insurance was proposed. But due to COVID-19 pandemic, this increase was not implemented.
IRDAI had proposed the increase in Third Party Insurance premium on car and two-wheelers from April 1, 2020. According to IRDAI proposal, for less than 1,000 cc vehicle engines third party insurance premium has been fixed at Rs 2,182 which is now at Rs 2,072. For 1,000 to 1,500 cc vehicle engines third party insurance premium was proposed to be increased to Rs 3,383.
Why will premium not increase this year too?
From April 1, bima companies apply new premium rates on insurances. But according to sources, suggestions have not yet been sought from IRDAI to increase the proposed rates so far. So it is assumed that this year too there will be no increase in premium rates.
Last year due to COVID-19 pandemic when the entire country was in a lockdown, for 6 months vehicles did not come out on the roads. Due to this, accidental claims for bima companies were very low and their very big expense was saved.
Therefore, it is possible that the insurance companies give the benefit of savings in this expenditure, to the customers. Other than this, a very important reason could also be the price of petrol and diesel which is at a record level. At a time when the common people are already troubled by this inflation, the insurance companies will not increase the premium so that people can be saved from the extra burden.
How will consumers benefit?
According to Motor Vehicle Act, for every vehicle third party insurance is a must as per law. For people buying new vehicles, they will get big relief in major part of insurance.
In a new vehicle, 4-wheeler for 3 years, 2-wheeler for 5 years, third party insurance is necessary. That is, if you are going to buy a new car, then you will not have to pay much premium.
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 "Third party motor insurance")
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