The premium rates for motor third party insurance are set to go up significantly from April.
In an exposure draft on premium rates for the next financial year, the Insurance Regulatory Authority has proposed to hike the premium rates for different classes of vehicles.
“It is observed that in any given vehicle class, there is a large variation in premium changes amongst the various sub-classes,’’ M. Ramprasad, Member (Non-life), IRDA, said in a circular.
The premium increase for various classes of vehicles range approximately from 10 per cent to about 180 per cent, according to the proposal.
For example, for private cars, the increase would be 38.87 per cent over the previous year’s premiums of all its sub-classes.
IRDA had brought in significant reforms in the motor third party insurance segment by disbanding motor third party pool from April 1, 2012 and setting up a decline pool in its place in view of the mounting losses for the general insurers.
This will be the first review of premium rates in the new set up.