Third-party motor insurance cover more costly now

Your third-party motor insurance cover has turned more costly for the current financial year after insurance regulator Irda raised the premium rates by 20% for private cars and by 10% for two-wheelers.

One of the main reasons for the increase is the sharp rise in average death claim size. For example, the average death claim size has risen 85% over the last five years; it was Rs 3.86 lakh in 2012-13.

However, you need not worry much. The hike is unlikely to affect you much as third-party cover forms a small portion of the total premium. For example, for private cars with engine not exceeding 1000 cc, rates have increased by just Rs 188 from Rs 941 last year to Rs 1,129.

Similarly, for private cars, exceeding 1,000 cc but not more than 1500 cc, rates have been increased by Rs 232 to Rs 1,332.

Irda took the decision following the recommendations on the draft exposure which were put up on its website in February for comments from the interested parties.

Earlier, Irda had proposed a steep hike of up to 137% for private cars, but revised the rates downwards due to widespread protests by consumers, bringing relief to thousands of policyholders.