You have just bought a car and now you realize that the third party insurance on it is more expensive than you thought. What can you do about it? Getting an insurance quote online has become an easy process, first you need to know a few things. It includes the cost-effectiveness of the policy, what add-on covers are available and how to compare insurance policies. Read on to find out how you can save money and gain peace of mind on your first policy.
IRDAI hikes rates for third-party insurance
The exposure draught for the change of the third-party insurance premium rates for cars has been made public by the Insurance Regulatory and Development Authority of India (IRDAI). For private vehicles and two-wheelers with engines between three Kilowatt and fifteen thousand cc, as well as for electric two-wheelers, the premium rates will rise. The third-party premium cost for two-wheelers with engines between three Kilowatt and fifteen thousand cc would increase by Rs700.
Motor Third Party (TP) premium rates for two-wheelers will be hiked by between 11 to 20 percent, depending on the engine capacity. The increase for the two-wheeler segment is accompanied by an increase of up to 38 rupees in the case of the Maruti Swift 1.3 LXI. Car premium rates are expected to increase by one to six percent for the same engine capacity.
The government is now set to hike third-party auto insurance premium prices once again. The most recent change in these rates took place in June 2019. The rates are expected to rise further as the country is expected to experience the COVID-19 pandemic in 2019-20. Now, the government has requested feedback from the affected residents by 14 March 2020. For private vehicles of 1,000 cc or more, there is a third-party insurance charge of Rs 3,416 as opposed to Rs 2,072 under the previous amendment.
The rise in premium rates is expected by the general insurance industry. The Irdai normally initiates revision of third-party premium rates each year, but last year due to Covid-19 pandemic, the Irdai put this activity on hold. This is expected to increase third-party premium rates by fifteen to twenty percent by 2022. In addition to this, recent court judgments have had an effect on the insurance industry.
The premium rates for third-party insurance for cars with engine capacities of up to 1500 cc will remain unchanged at Rs 7,890. Public and private goods-carrying vehicles will also see an increase in the TP premium rate of Rs 5,000. School buses will get a slight increase of Rs 900. The increase isn’t as drastic as some might have feared.
Cost-effectiveness of the policy
An increase in third party premium costs for private vehicles has been proposed by India’s Insurance Regulatory and Development Authority. Since two years ago, the rates have not changed. For cars with engines larger than 1500 cc and smaller than 1000 cc, the new planned pricing will apply. In the event that the costs continue to be unaffordable, consumers have to think about getting a standalone third-party insurance coverage. The price of third party insurance will increase by a stunning 50% for cars in the mid and higher categories.
The insurance premium is determined by the Insurance Regulatory and Development Authority (IRDA). This is more or less the same for all insurers. However, the premium may vary according to the engine capacity of a vehicle. Thus, a Hyundai i10 owner will pay a different premium than a Toyota Altis owner. The IRDAI revises the premium rates every year. It also takes into account the number of claims and loss ratios of insurers. Third party motor insurance is mandatory for all vehicles and covers the liability arising out of accidents. A comprehensive motor insurance policy includes two components, own damage and third party. Third party insurance constitutes about 90% of the premium.
Add-on covers available
A comprehensive policy provides a range of supplemental coverages. While add-on insurance is intended to protect both the policy holder and other passengers in the car, a comprehensive coverage covers all costs associated with damages or repairs to property belonging to another person. If the policyholder or another person is killed in an automobile accident, the insurance company will submit a stated insurance claim on the policyholder’s behalf. Typically, third party insurance is only allowed to cover 50% of a car’s replacement cost.
Comparison of policies
If you are looking for third-party insurance for your car, it’s worth taking the time to compare the prices offered by different insurers. These insurers can offer you different levels of coverage, which may be the best option for you. When comparing car insurance, it’s helpful to know which plans have the lowest premiums and which are more expensive. You can also check out the network of garages a company has to handle car accidents.