Here comes next blow: Centre hikes third-party motor insurance premium, significant rise for cars and two-wheelers

NEW DELHI: The central government has sharply hiked the third-party motor insurance premium for various categories of vehicles. The move is likely to cause a significant increase in the insurance of cars and two-wheelers. The insurance premium had not been hiked for two years due to Covid-19 pandemic. The revised insurance premium will come into effect from June 1 onwards.

As per the revised rates, private cars with an engine capacity of 1,000 cc will attract rates of Rs 2,094 compared to Rs 2,072 in 2019-20. Whereas, cars with an engine capacity between 1,000 cc and 1,500 cc will attract rates of Rs 3,416 compared to the current rate of Rs 3,221.

There is a significant hike in the insurance premium of two-wheelers as well. The two-wheelers over 150 cc but not exceeding 350 cc will attract a premium of Rs 1,366, while for those over 350 cc, the revised premium will be Rs 2,804. There is premium hike for commercial vehicles as well. In the case of goods carrying commercial vehicles exceeding 40,000 kg, the premium will increase to Rs 44,242 against Rs 41,561 in 2019-20. Similarly, the premium for goods carrying commercial vehicles exceeding 12,000 kg but not 20,000 kg will increase to Rs 35,313 from Rs 33,414 in 2019-20.

According to the notification issued by the Ministry of Road Transport and Highways (MoRTH), there shall be a discount of 7.5 per cent on the premium for hybrid electric vehicles. Meantime, electric private cars not exceeding 30KW will attract a premium of Rs 1,780, while those exceeding 30 KW but not 65 KW will attract a premium of Rs 2,904. In addition, a discount of 15 per cent has been provided for educational institution buses.