Your motor third-party insurance premium might become costlier soon
What's the story
The Indian government is likely to hike motor third-party (TP) insurance premiums this year. The move comes as part of a broader effort to balance the insurers' loss ratios over the next two years. The compulsory insurance, which covers liability for third-party injury, death or property damage, is expected to see an increase in costs for bigger passenger and commercial vehicles.
Consultation
Stakeholder discussions ongoing
The government has started discussions with various stakeholders to finalize the changes in motor TP insurance premiums. One of the key points of discussion is whether higher premiums should be levied on drivers with traffic violations. Regulators are also looking at revising and possibly increasing the third-party premium for three-wheelers, considering a graded hike across the vehicle categories or a uniform increase.
Process
Annual revision process
Motor TP insurance premiums are usually revised every year after consultations with the insurers, industry bodies, as well as other stakeholders. The government is now considering a hike in these premiums again.