The Insurance Regulatory and Development Authority of India (IRDAI) has notified the premiums for third-party liability cover of motor insurance. This is for the first time since 2011-12 that the premiums for all three categories of private cars have been reduced as compared to previous year’s.
According to the notification, the premium for cars with an engine capacity of 1,000-1,500 cc has been reduced by around 9% whereas the segment saw a rise of 40% last year. The premiums for cars below 1,000 cc engines have also reduced by 10% which was left unchanged last year.
Not only for four-wheelers, but two-wheelers have also seen a change in their premiums. While the premiums for two-wheelers with engine capacity of less than 75 CC has been reduced by over 20%, whereas the owners of motorcycles with capacity over 350 CC will see their third-party liability premiums double compared to last year.
Done mainly to sync the collected claims and premiums, this revision of premiums is an annual exercise done by IRDAI. This exercise is done based on the data submitted by the insurers on their loss experience.
“With own-damage premiums also reducing over the past few months due to higher discounts by insurers, it is a win-win situation for consumers," said Balachander Sekhar, Chief Executive Officer, RenewBuy.com.
The industry is expecting a fall in overall premiums to promote consumers who would otherwise just buy the mandatory third-party liability cover, will now buy comprehensive policies.