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The cost of car insurance for a four-wheeler and two-wheeler owners is set to rise starting June 1 this year. The speculation comes as the ministry of road transport and Highway (MoRTH) announced in a notification that the third-party motor insurance price for certain kinds of vehicles will increase with effect from June 1. The decision is likely to raise the cost of vehicles and two-wheelers, giving vehicle owners in India yet more reason to be concerned. A litre of petrol costs roughly Rs 100 in India.
According to the increased insurance rates announced by the road transport ministry on Wednesday, May 26, private cars with a 1,000cc engine would pay Rs 2,094 in insurance, up from Rs 2,072 in 2019-20. Private cars with engines ranging from 1,000 to 1,500 cc, on the other hand, will pay Rs 3,416 for car insurance, compared to Rs 3,221. According to the notification, car owners with engines larger than 1,500 cc will have to pay a premium of Rs 7,897.
Two-wheelers with engines larger than 150 cc but less than 350 cc would be charged a premium of Rs 1,366; those with engines larger than 350 cc will be charged a revised premium of Rs 2,804.
According to a report by PTI, the new third-party (TP) insurance premium will go into effect on June 1 after a two-year hiatus owing to the COVID-19 epidemic. The Insurance Regulatory and Development Authority of India had previously published third-party insurance prices (IRDAI). The road transport ministry has announced third-party insurance rates for the first time in cooperation with the insurance regulator.
According to the ministry's announcement, hybrid electric vehicles would be eligible for a 7.5 per cent premium reduction. Electric private automobiles with less than 30 kilowatts will be charged Rs 1,780, while those with more than 30 kilowatts but less than 65 kilowatts would be charged Rs 2,904.
In 2019-20, the premium for goods-carrying commercial vehicles weighing more than 12,000 kg but less than 20,000 kg would rise to Rs 35,313 from Rs 33,414. The premium for goods-carrying commercial vehicles weighing more than 40,000 kg would rise to Rs 44,242 from Rs 41,561 in 2019-20.
Other than own damage, third-party insurance is required in addition to the own damage coverage that a car owner must obtain. This insurance covers any collateral damage caused by a road collision to a third party, usually a human individual.
According to the announcement, educational institution buses will receive a 15% discount. "A private car classified as a Vintage Car has been permitted a lower price of 50% of the premium," it noted.
The increase in automobile insurance premiums comes at a time when India is already dealing with rising inflation, with individuals having to pay more money for basic items, and motor fuel prices have also risen.