The Insurance Regulatory and Development Authority of India (IRDAI) usually adjusts the third-party insurance premium for vehicles from April 1^st of every year. However, that wasn’t the case in 2019. IRDAI had decided to continue with the old rates. Now, however, it has proposed an increase in third-party insurance premiums for vehicles, including cars.

For the uninitiated, third-party insurance premium for a car is calculated on the basis of its engine size. The two main categories which encompass most of the mass-market models are < 1,000cc and between 1,000cc and 1,500cc. Up until now, third-party insurance providers were asking for a premium of Rs 1,850 for the first category and Rs 2,863 for the second one. IRDAI has proposed that those figures should be hiked to Rs 2,120 and Rs 3,300, respectively.

Do the math and you’ll notice that in the first category, IRDAI has proposed to hike the third-party premium by nearly 14.6 per cent. In the second category, the proposed hike is nearly 15.26 per cent. In the first category, cars like the Renault Kwid and the Maruti Suzuki Alto are covered. Under the second one, everything from the Hyundai Santro, Maruti Suzuki Swift, Ford Figo to Tata Nexon, Mahindra XUV300 and the Honda City are covered.

What about cars which have engines above the 1,500cc-mark? Well, IRDAI has not proposed any change for that category. That means if you are in the market for models like the Hyundai Tucson, Ford Endeavour, Toyota Innova and the Skoda Superb, you’ll still be paying a third-party insurance premium of Rs 7,890.

Apart from studying data provided by the Insurance Information Bureau of India (IIBI), IRDAI also considered the claims paid data in respect of each of the accident years starting from 2011-12 to 2017-18. Also roped in was the compiled data for gross written premiums for the 2011-12 to 2017-18 period. The insurance regulator has sought comments from stakeholders on the proposed changes till May 29, 2019.

Source: PTI