Good news for private vehicle owners: third-party motor insurance premiums will not be increased

As the insurance regulator, IRDAI, has good news for private vehicle owners, both 4- and two-wheelers, the current third-party premium insurance rates for 2019-20 stand extended from 31 March 2020 until further notification. It means that third-party motor insurance premiums will not be increased for the next financial year i.e., FY2020-21, as previously proposed unless the regulator notifies the same.

This step may be due to the spread of coronavirus infection in the country and the lockdown caused by the situation arising from it. The government has already postponed several deadlines and announced relief for the common man in various areas due to the lockdown.

In an order dated 27 March, the Insurance Regulatory and Development Authority of India (IRDAI) stated that the validity of premium rates for motor third-party liability insurance cover for 2019-20 stand extended from 31 March 2020 to further notification. Accordingly, all insurers will continue to charge for motor third party liability insurance cover from April 1, 2020, until current orders.

It means insurers must continue to pay the same rate to cover motor third-party liability insurance from April 1, 2020, unless the regulator notifies any rate adjustments.

Earlier, the regulator proposed a substantial increase in third-party motor insurance premium rates for the financial year 2020-21 in the exposure draft issued by IRDAI on March 5, 2020. The proposed fees were:

Private car third-party premium rates offered

For the fiscal year 2020-21, it was proposed to increase the motor third-party premium rates from 1000 cc to Rs 2,182 for cars with engines less than 1000 cc from the existing Rs 2,072.