IRDAI and the Road Ministry have recommended an 18% premium increase. But in some categories, this increase can be up to 20 to 25%. A proposal to increase insurance is possible in 1-2 weeks. The increase in motor insurance premium will affect the pockets of customers.
Third party motor insurance: Third party insurance for vehicles is an affordable insurance, so most people prefer to take it. This insurance compensates for the damage caused to a third person by the vehicle. It is legally mandatory in India. But now the news is coming that third party motor insurance can now become expensive. After RDAI, now the Finance Ministry is also in favor of increasing the premium of motor insurance and has recommended an increase of 18 percent premium. With the increase in premium, it is possible to improve the combined ratio of insurance companies by 4-5%. There has been no increase in motor third party premium for the last 4 years.
Recommendation to increase premium by 18 percent
IRDAI and Road Ministry have recommended an increase of 18% premium. But in some categories this increase can be up to 20 to 25%. A proposal to increase insurance is possible in 1-2 weeks. Increasing the premium of motor insurance will affect the pockets of the customers. Now in such a situation, if the proposal of the ministry is approved then a draft notification will be issued, after which the public suggestion and review process will start and then the new rates will be implemented.
What difference will it make if third party motor insurance becomes expensive?
According to experts, an 18% increase in premium can lead to a 4-5% improvement in the combined ratio of insurance companies. There has been no increase in motor third party premium for the last 4 years. Let us tell you that the third party premium share in total motor insurance is 60%, and this is because its annual premium is low.
What is third party insurance?
Third party insurance is the most economical. If your vehicle causes damage to someone else’s vehicle or injury, then third party insurance compensates for these losses. This insurance is legally mandatory in India. But keep in mind, if you or your vehicle suffers any damage in an accident, then third party insurance does not cover all this, for this you will need comprehensive insurance.
