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Third Party Insurance Premium for Unlimited Liability

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Published on September 21, 2022. EST READ TIME: 3 minutes

The IRDAI, or Insurance Regulatory and Development Authority of India, regulates all insurance policies in the country. As far as policies of vehicles are concerned, the IRDAI publishes the premium rates for third party insurance for car and other categories of vehicles. And insurance companies must abide by those.

Recently, IRDAI, along with the Ministry of Road Transport and Highways, has updated all the premiums for third party policies. These impact all the vehicle categories, and the following are all the details regarding the recent changes. It would help you to get a better understanding of your policy premium, either for new policy purchases or for policy renewals.

Motor Vehicles Rules, 2022 Vide Notification Dated 25.05.2022

On the 25th of May 2022, the Ministry of Road Transport and Highways along with the Insurance Regulatory and Development Authority of India, presented the updated Motor Vehicles Rules 2022. The primary reason for the update to the Motor Vehicles Rules is to increase the premiums for third party insurance with unlimited liability. The mentioned rules come into effect on the 1st of June, 2022.

Key Highlights of Ministry of Road Transport and Highways Notification

The following are the key highlights of this notification published by IRDAI and the Ministry of Road Transport and Highways.

1. Cars for private usage with 1000cc as its engine capacity will attract premium rates of Rs. 2,094. Similarly, the premium for cars with engine capacity between 1000 cc and 1500 cc will be Rs. 3,416.

2. One-time premium for two-wheelers with a 75cc engine capacity is set at Rs. 2,901. The premium for bikes between 75cc and 150cc is set at Rs. 3,815. For bikes with engine capacity exceeding 150cc but less than 350cc, the policy premium is set at Rs. 7,365. And the same for two-wheelers with engine capacity exceeding 350cc for a five-year duration is now set at Rs. 15,117.

3. Policy premium for a single year for bikes with a 75 cc engine is set at Rs 538. Policy premium for bikes between 150cc and 350cc engine capacity will be Rs. 1,366, and likewise, the premium for bikes with a capacity of 350cc and more will be Rs. 2,804.

4. The policy premium for three-year car insurance for 1000cc cars is now Rs. 6,521, whereas the premium for cars with engine capacity between 1000cc and 1500 is set to Rs. 10,640. New private cars that have an engine capacity of more than 1500cc will now cost Rs. 24,596 as per the new rates.

5. The change in rates is applicable to electric vehicles as well. If you buy a new private electric vehicle whose capacity does not exceed 30KW, the three-year policy rate is Rs. 5,543. For EVs with a capacity between 30KW and 65KW, the policy premium for a three-year policy is Rs. 9,044. And for EVs with a capacity exceeding 65KW, a three year third party liability will now cost Rs. 20,907.

Discounts In Premium Allowed In The Said Rules

The Motor Vehicles Rules 2022 have not only increased the policy premiums but now offer some additional discounts as well. Here are the discounts that are not available.

1. If you own an electric vehicle or a hybrid electric vehicle, you can avail yourself of a discount of 7.5% on the policy premiums.

2. If you own a private car that is classified as a vintage car, you can expect a discount of 50% on the policy premiums.

3. For educational institution busses, a discount of 15% has been set on the policy premiums.

Base Premium For Vehicles Per New Rules

Vehicle Category For Private Cars	Premium Rates
Up to 1000cc	Rs. 2,094
Between 1000cc and 1500cc	Rs. 3,416
Above 1500cc	Rs. 7,897
For Bikes
Up to 75cc	Rs. 538
Between 75cc and 150cc	Rs. 714
Between 150cc and 350cc	Rs. 1,366
Above 350cc	Rs. 2,804
Commercial Vehicles (Goods Carrying – except three wheelers)
Weighing capacity up to 7500 Kgs	Rs. 16,049
Between 7500 Kgs and 12000 Kgs	Rs. 27,186
Between 12000 Kgs and 20000 Kgs	Rs. 35,313
Between 20000 Kgs and 40000 Kgs	Rs. 43,950
Above 40000 Kgs	Rs. 44,242
Three Wheelers and Motorised Pedal Cycles for Carrying Goods – Public Carrier
With the exception of e-carts	Rs. 4,492
Three Wheelers and Motorised Pedal Cycles for Carrying Goods – Private Carrier
With the exception of e-carts	Rs. 3,922
Trailers
Tractors up to 6 HP	Rs. 910
Other Types of Vehicles	Rs. 2,485

Long Term Premium Rates

Electric Vehicles
Private Cars – Three years Single Premium Policy
Up to 30KW capacity	Rs. 5,543
Between 30KW and 65KW	Rs. 9,044
Above 75KW	Rs. 20,907
Bikes – Five years Single Premium Policy
Up to 3KW	Rs. 2,466
Between 3KW and 7KW	Rs. 3,273
Between 7KW and 16KW	Rs. 6,260
Above 16KW	Rs. 12,849
Quadricycle
Private Cars	Rs. 2,094
Electric Car not exceeding 30KW	Rs. 1,780
Commercial Vehicle not exceeding 500cc	Rs. 2,539

Long Term Rates for Quadricycles

Quadricycle – Three year Single Premium
Private Cars	Rs. 6,521
Electric Car not exceeding 30KW	Rs. 5,543

Conclusion

There is no doubt that third party car insurance is essential. In the event of an accident that involves a third party individual, vehicle or property, the policy comes to your rescue. It offers financial protection in such cases. Also, third party insurance for car is made mandatory as per the Motor Vehicles Act. The recent changes to the Act have had an impact on the policy premiums of third party policies. The above details should help you get a better idea of your policy premium, either on the purchase of a new car or policy renewal of an existing one.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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