The insurance regulator IRDAI yesterday proposed reductions in the premiums to be levied on insuring small private cars and certain types of two-wheelers, but plans to raise premiums for several categories of goods vehicles.
The IRDAI released an exposure draft on premium rates for motor third-party (TP) insurance covers for the financial year starting 1 April 2018 (FY2019) and has invited stakeholders to provide feedback on it by 22 March, reported Press Trust of India.
The regulator has proposed to lower the premium for third-party insurance, which is mandatory, on cars with an engine capacity of less than 1,000 cc to INR1,850 (US$28.50) from the existing INR2,055, a decrease of 10%. The draft does not propose any change in the existing rate for cars with an engine capacity higher than 1,000 cc.
If the draft is approved, the premium on two-wheelers with less than a 75 cc engine will fall to INR427 from the current INR569, representing a reduction of 25%. No change has been proposed for entry level bikes (75-150 cc).
At the same time, the IRDAI proposes to more than double the premium on super-bikes (exceeding 350 cc) to INR2,323. Also, an increase has been proposed for performance category bikes (150-350 cc). The regulator has proposed to either increase or maintain the premium rates for most of the categories of commercial vehicles.
The proposed premium on goods carrying vehicles (exceeding 40,000 kg) is INR39,299 from the current INR33,024, an increase of 19%.
The exposure draft also says that a discount of 50% would be allowed for private cars certified as 'vintage cars' by Vintage and Classic Car Club of India.
There is also a proposal to reduce the third-party premium for certain categories of four-wheel vehicles used for carrying passengers, as well as to increase by 25% the premium for farm tractors of up to 6 HP from INR653 to INR816.
The data provided by the Insurance Information Bureau of India has been used to arrive at the proposed motor TP premium rates proposed for FY2019.