Vehicle Insurance Market Witnessing Growth, Its Third Party Insurance Segment To Reduce Premium Cost
Eventually, in the new financial year, the vehicle owners got the good news. After the constant increase in the third party premium of auto insurance for two consecutive years, the Insurance Regulatory and Development Authority (Insurance Regulatory and Development Authority, i.e. IRDAI) has proposed a lower or equal premium on vehicles for most categories for 2018–19. According to the average of the losses incurred by IRDA claims and insured, the premium rates change every year. Taking the motor third party cover is mandatory for all vehicles. Third party claims are covered in the accident case.
IRDA has proposed to keep third-party premium Rs 1,850 for cars up to 1,000cc in 2018–19, which was Rs 2,055 in 2017–18. For above 75CC two-wheeler vehicles, a premium of Rs 427 for 2018-19 has been fixed, which was Rs. 569 in last year. Regulators increased the third-party premium of cars by more than 1,000-1,500cc and 1,500cc in 2017-18 by 28%, although it had earlier proposed 40% growth. The premium of two-wheelers with a capacity of 150–350cc and 350cc above was also increased evenly.
Except for tricycle, premiums for some carriers associated with public carriers category will be increased. These include 7,500–12,000 kg, 12,000–20,000 kg and 20,000–40,000 kg capacity vehicles. However, premiums for vehicles with gross weights up to 7,500 kg have not increased. This category of private vehicles may or may not affect with the slight increase. Third party premium will be reduced for motor vehicles, motorcycles while premium rates for tractors up to 6HP are projected to increase.
The move by the IRDA will probably help to promote the importance of vehicle insurance and by reducing rates, the numbers of fresh renewed or purchased policies are expected to spur. Growing awareness about the road safety and risk of death has motivated the vehicle owners to at least have a third party insurance.