HomeBike NewsCars, Bikes to Cost More As IRDAI Mandates Long-Term 3rd Party Insurance

Cars, Bikes to Cost More As IRDAI Mandates Long-Term 3rd Party Insurance

As per the Supreme Court order, all new car insurance / bike insurance purchased on or after September 1, 2018 will be mandatorily required to have long-term third-party insurance. The top court has taken the decision in view of problems faced by road accident victims in claiming compensation from owners of uninsured vehicles. Third-party insurance is mandatory for all vehicles as per the Motor Vehicles Act, 1988, but the rule is not properly followed by vehicle owners.

As per IRDAI’s order, new cars will have to take three-year third-party insurance whereas two wheelers will have to take five-year third-party insurance from vehicle insurance companies. This will increase the overall cost of buying a new car or two-wheeler. In case of cars below 1000cc, the insurance premium will be Rs 5,286; for 1000cc to 1500cc – Rs 9,534 and for 1500cc and above – Rs 24,305.

In case of two-wheelers, the insurance premium for vehicles up to 75cc will be Rs 1,045; for 75cc to 150 cc – Rs 3,285; for 150cc to 350cc – Rs 5,453; and for more than 350cc – Rs 13,034.

IRDAI’s new rule of long-term insurance will be applicable only for third-party insurance. For comprehensive insurance that covers accidental damage, theft, etc., customers can choose one year or three year insurance for car and one year or five years in case of two wheeler insurance. All general insurance companies will have to provide long-term third-party insurance for new cars and two-wheelers, either as a separate policy or as part of the comprehensive insurance policy.

In its circular, IRDAI has also said that after the launch of long-term third-party insurance, customers will have to be given two options. In one option, customers can buy long-term insurance cover that includes both third-party insurance and own damage insurance for either 3 or 5 years. In the second option, third-party insurance can be taken for 3/5 years whereas own damage insurance can be taken for one year.

Rushlane Google news