Click to play videoHyderabad: The Insurance Regulator and Development Authority (IRDA) has reversed a move to de-tariff third party motor insurance and instead, raise the cap on the premium. This means that you will have to pay at least a third more for your car insurance.
The fresh rates for third-party motor insurance policies will to be enforced from the January 1.
While owners of buses, trucks and other public vehicles will have to cough up 150 per cent more for insurance policies because they make more claims, private car owners will have to pay between 30 and 35 per cent more.
And those who drive high-end cars of over 1500cc will need to pay upto 200 per cent more because such cars cost insurers more. The premium collected will be deposited in a motor pool, from where it will be doled out to pay claims.
Third party motor insurance has been a loss-making business for insurers and the regulator fears de-tarrifing this portfolio would result in the skyrocketing of premiums—something it wanted to avoid on a policy that's mandatory for all vehicle users.
The regulator foresees resistance from transport associations which have always argued that their premium should be decided on their ability to pay and not their claim history. But the IRDA is keen to give some relief to insurance firms and bigger bills to vehicle owners.
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