The Ministry of Road Transport & Highways has proposed new third-party motor insurance premium rates for different categories of vehicles, including two-wheelers, passenger cars and commercial vehicles, for the financial year 2023-24.
As per a draft notification issued by the ministry, the base premium rates for motor third-party insurance cover have been proposed at ₹2,094 for private cars below 1,000 cc, ₹3,416 for cars between 1000 cc and 1500 cc and ₹7,897 for cars exceeding 1500 cc.
The draft rules have been prepared in consultation with the Insurance Regulatory and Development Authority of India (IRDAI).
For electric cars not exceeding 30 Kilowatt hours, the premium rates have been proposed at ₹1,780 and for 30 KW-65KW proposed rates are ₹2,904, and for electric cars exceeding 65 KW, the premium has been proposed at ₹6,712.
A discount of 15% and 7.5% has been proposed for electric vehicles and hybrid electric vehicles, respectively.
A discount of 15% has been proposed for educational institution buses and a discount of 50% has been proposed for a private car registered as a vintage car. A reduction of about 6.5% in the base premium rate has been proposed for three-wheeled passenger carrying vehicles.
The ministry has invited comments and suggestions from all stakeholders within a period of thirty days.
The proposed rates for electric two-wheelers not exceeding 3 KW is ₹457, 3 KW-7 KW (₹607), 7 KW-16 KW (₹1,161), and for 16 KW and above (₹2,383).
For battery-based goods carrying commercial vehicles (other than three-wheelers) not exceeding 7,500 kg, the proposed rate is ₹13,642, 7,500-12,000 kg (₹23,108), 12,000-20,000 kg (₹30,016), 20,000-40,000 kg (₹37,357), and for those exceeding 40,000 kg (₹37,606).
According to Moody's, Indian general insurers' claim expenses have risen in recent months due to inflation and a return to normal claims volumes after a pandemic-related decline.
"In line with global trends, Indian general insurers' claims expenses are rising because of high inflation and a return to more normal claims frequencies after a pandemic-induced decline in 2020. This, combined with higher reinsurance costs as global reinsurers seek to recoup hefty catastrophe losses globally, and increasing natural loss events in India in recent years, is putting pressure on their profitability," the ratings agency said in a note earlier this year.