IRDAI hikes motor cover premiums by upto 40%; all car and bike segments affected
Insurance Regulatory and Development Authority has issued statement regarding the new premium rates for the cars across the entire range from entry-level models to the high-end luxury vehicles. As predicted, the insurance rates have been hiked substantially `and for the year 2016 to 2017 it will have a significant impact across the different range and types of four wheelers.
In a less desired note, the car insurances have become costlier by as much as 40% for the financial year 2016 to 2017 and the opulent luxury type models wouldn’t escape the new agenda either. The premium and luxury cars, despite being more frugal, greener and safer, will see a premium rate increase to Rs. 6.164 – that is effectively one-fourth hike from the previous term.
The third-party motor insurance is compulsory for all vehicles running on the Indian roads irrespective of their category and it has to cover the damage claims emerge due to accidents. Several reasons were cited for the increase in premium rates by IRDAI that include loss ratios and numerous issues provoked by the insurers.
For the cars with engine capacity below 1.0 litre in the entry-level first-time buyers’ scale like the Maruti Suzuki Alto, Renault Kwid, Tata Nano and the likes, the premium rates surged by 40 percent and it now stands at Rs. 2,055. The compact or B segment vehicles ranging from the power unit capacity of 1,000 cc to 1,500 cc – which pretty much covers all the other affordable cars – will have to make do with the hike of 25 percentage for sedans and increase of 40 percentage at Rs. 2,237 for other vehicles.
The IRDAI regulators have announced the premiums for two-wheelers as well. For bikes below 75 cc capacity the increase has been at an average of 9.6 percentages and owners of the two-wheelers between 75 and 150 cc will have to oblige with the increase of 15 percent. This applies to a rise of Rs. 569 and Rs. 619 respectively from the previous year’s premium.
The premium bike category accounting for the capacity between 150 and 350 cc, the IRDAI has increased premiums by 25 percent and the superbike segment above 350 cc will have to bite the hike of 10 percent. On the contrary, the private goods-carriers weighing below 7.5 tonnes will have the premiums lowered by 10 percent at Rs. 7,849. The rates for private autos stepped up by 3.2 percent to Rs. 4,200.