IRDA Revises Third-party Insurance Rates: Here is All You Need to Know

 The Insurance Regulatory and Development Authority (IRDA) has introduced some changes to third-party insurance by introducing revised third party insurance premium rates for some categories of vehicles. The new premium rates have been in force from April 1, 2017. With this announcement, changes in terms of premium rate are visible in the good carrying vehicles or public carriers. Three wheelers are excluded, however.

The IRDA’s recent report dated March 28, 2017, indicated a massive hike in premium rates for goods carrying vehicles, which went up to 40%. The rate varied depending on the load. If take the example of previous rates range between INR 15,365- INR 24,708. This rose up to INR 23,047-Rs 37,062 with the increase of premium rate.  It was also on news that truckers in the South went on strike for 10 days protesting the sheer hike in the compulsory auto third-party insurance. They also held discussions with the concern regulatory body asking for a reduction in rates.

With the new announcement made by IRDA, significant changes have been visible. Let’s take the above example. Applying the new rules, now the rates range from Rs. 21,511 – Rs. 36,120 to Rs. 19,667-Rs 33,024.

The premium for private cars is affected as well especially those exceeding 1000 cc and 1500 cc, including special types of vehicle, agricultural tractors and two wheelers.

Revised Premium Rates:

Vehicle Type Previous Rate New Rate
Cars with engine capacity (more than 1,500 cc) 8,630 7,890
Cars with engine capacity (less than 1,000 cc) 2,055 No change
Goods carrying vehicles or public carriers (Exceeding 40,000 kg) Rs 36,120 Rs 33,024
Mid-segment cars (1,000cc – 1,500 cc) Rs 3,132 Rs. 2,863

The two-wheelers are also introduced with reduced premium rate. Similarly, reduction has also affected e-rickshaws or other passenger-carrying vehicle.  However, if we compare the current economic, the premium rates are still higher.

What is Third-Party Insurance?

Also famous as an ‘act only’ policy, the third-party insurance protects against the actions of the third party. This policy covers claims for damages or losses caused by you to a third party. It is a kind of insurance purchased by the first party-the insured, by the second party-an insurer, for ensuring financial assistance against the claim of others-the third party. The first party wouldn’t get any benefits in this event. This plan is mandatory by the law for all car owner at the time of purchasing a car.