Mumbai
In what has come as relief for motor insurance holders, annual premium rates increase for third party motor insurance policies have been put on hold for the next financial year for now.
The insurance regulator today said that insurers will continue to charge the rates currently being charged for Motor Third Party Liability Insurance Cover from April 1, 2019 until further orders. The annual increase depends on the vehicle type and engine capacity and it goes up by 10-20% every year. Third party insurance policies are mandatory by law. It pays for financial liabilities borne by vehicle owner in case of mishap. The insurance regulator has been raising insurance premium so that the prices are actuarially at par with the loss ratio of the industry.
Income from selling comprehensive motor insurance has been flat for the financial year partly due to adventurous business practices adopted by insurance companies in implementing motor insurance service provider norms. Also, Supreme Court mandated long term third party motor insurance products of three years for cars and five years products for two wheelers, leading to premium increase of 2-5 times from August 1, 2018.
Last year Irdai had reduced third party motor insurance rates for cars not excessing 1000 cc engine while raised for higher engine capacity vehicles. Also for bikes, the rates were raised
