Page 408 - Motor Insurance Ebook IC 72

The Insurance Times

Q. 30. What are the changes proposed by the IRDA in
motor insurance in India.? Give an update on
Motor Insurance.

Ans: The IRDA has published its proposed new tariff for
third party motor insurance-the cover which
compensates accident victims and has to be mandatorily
purchased by all vehicle owners.

The IRDA, however, has not notified the date when the
tariff comes into force.

The regulator has revised prices considering that third
party motor insurance faced a deficit that could touch
Rs 2,000 crore. While the premium for private vehicles
will rise, it will not be as steep as that for trucks. For a
sub-1000cc vehicle, the increase will be from Rs 670 to
Rs 740, while for cars up to 1500cc the premium will
rise from Rs 800 to Rs 880. In the case of trucks
weighing up to 7500 kg the premium will go up from Rs
5,580 to Rs 10,040.

For a truck, the proposed increase is less than Rs 500
per month. For a transporter, the insurance cost is a
fraction of the total expenditure and the increase is less
than the rise in other operating expenses such as fuel.
The deficit in third party motor insurance is being met
by all other policyholders who end up paying more. The

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