On the back of a supreme court order, the Insurance Regulatory and Development Authority has issued a new order which comes into effect tomorrow, the 1st of September 2018. The new order will see car and motorcycle insurance become more expensive as long-term third-party insurance will now be made mandatory. As per the new ruling third-party insurance will cost Rs 5,286 for cars with engine capacity less than 1000 cc, Rs 9,534 for cars between 1000cc and 1500cc, and Rs 24,305 for cars more than 1,500 cc. Meanwhile, two-wheelers will get their 5-year third party insurance will cost a comparatively nominal RS 1,045 for vehicles under the 75cc mark. Although there a no two-wheeler currently on sale in India that is below the 75cc mark. Meanwhile, two wheeler insurance for bikes between 75 cc and 150cc will be priced at Rs 3,285 while, 150cc-300 insurance will cost Rs 5,453 and a pretty chunky Rs 13,034 for those that breach the 350cc. According to the Motor Vehicle Act, third-party insurance has been made mandatory.
Less Than 1000cc (Maruti Suzuki Alto 800, Renault Kwid, Datsun Go etc)
It is important to note that these rates are only for the mandatory third party insurance which will now be required to be bought for 3 years at a time for cars and 5 years for motorcycles and scooters. A comprehensive insurance will be offered as a separate package, to cover theft, damage and more depending on the package you have opted for. As per the new ruling from the supreme court order, it is now mandatory for all general insurance companies to issue a three-year third party insurance cover for new cars and five-year third party (TP) insurance cover for new two-wheelers as a separate product or as part of a comprehensive insurance product.
Concurrently, the IRDAI has issued a circular to this effect, which states that general insurers should "offer only three-year Motor Third-Party Insurance covers for new cars and five-year motor third party insurance policies for new two-wheelers". As of now, vehicular insurance is offered in two strata -- a stand-alone Motor Third-Party Policy and Motor Package Insurance Policy for two-wheeler and private cars. The IRDAI also stated that after the introduction of a long-term third-party insurance, the insurer will be presented with two options, a Long-term package cover offering both Motor TP insurance and own Damage insurance for three years or five years as the case may be or a bundled cover with a 3/5 year term for the TP component and a one-year term for the own damage.
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(Video provided by NDTV)
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