Government to increase Third-party vehicle insurance premium from June 1

The government has announced an increase in third-party motor insurance premiums for various categories beginning June 1. The new rates are expected to raise the cost of car and motorcycle insurance. This is the first time that the Ministry of Road Transport and Highways (MoRTH) has announced third-party rates in consultation with the Insurance Regulatory and Development Authority of India (IRDAI).

Moreover, Assam's Joint Commissioner of Transport has directed all District Transport Officers to notify all authorised automobile dealers within their jurisdiction to begin the printing process of the vehicle Registration Certificate on June 1, 2022.

According to the Ministry of Road Transport and Highways (MoRTH), private cars with a 1,000 cc engine will be charged Rs 2,094, up from Rs 2,072 in 2019-20, when the rates were last revised. Because of the COVID-19 pandemic, the rates remained unchanged.

Private cars with engines ranging from 1,000 to 1,500 cc will see their rates rise from Rs 3,221 to Rs 3,416. However, premiums for cars with engines larger than 1,500 cc will be reduced from Rs 7,897 to Rs 7,890.

Two-wheeler owners will also have to pay a premium of Rs 1,366 for bikes with a displacement of 150 cc but less than 350 cc, and Rs 2,804 for bikes with a displacement of more than 350 cc.

Hybrid electric vehicles will be eligible for a 7.5 percent premium discount, according to the ministry. Electric private cars with less than 30 kilowatts will be charged Rs 1,780, while those with more than 30 kilowatts but less than 65 kilowatts will be charged Rs 2,904.

This insurance covers any collateral damage caused by a road accident to a third party, usually a human being. Third-party insurance is required, as well as own-damage coverage, which must be purchased.

Buses from educational institutions will receive a 15 per cent discount. The ministry also allowed private cars registered as vintage cars to receive a 50 per cent discount on the premium.