Owning your dream car is surely going to come with many expenses, quite literally. Apart from its handling charges, what is the other expensive aspect of it? As surprising as it may sound, motor insurance for your car takes up your economical space as well. The recent reformation and regulation in the Insurance Regulatory and Development Authority of India (IRDAI) is the reason for the hike in motor insurance quotes.
On the other hand, insuring your car with motor insurance holds high regard in the market due to the rapidly growing number of cars. With its economic significance in the lives of many, purchasing motor insurance is inevitable irrespective of its costs. Although the price factor is important, a majority of people prefer buying vehicle insurance online plan due to its diverse benefits. So if you’re wondering about what has led to hikes in the cost of motor insurance, then keep reading:
List of rules that led to a hike in motor insurance costs:
- Third party insurance
The first and foremost reason for the rise in the cost of motor insurance is the payment of the insurance coverage of the third party. While it is a 3 year payment in terms of car insurance, two wheeler insurance covers for a period of 5 years. Whether it is a car or a two wheeler, this premium is collected for the stipulated period at the beginning of the policy in a lump-sum amount. While the rule of payment is applicable to brand new car and two-wheeler holders, people with older vehicles can pay the amount on an annual basis.
- Personal accidental cover
Another change by the IRDAI for the rise in the motor insurance costs is the personal accidental coverage that has been raised to Rs. 15 Lakhs.
The third party (TP) tariff rates also undergo certain drastic changes. The premium for a majority of car owners will be more as compared to those below 1000 cc segment. Take a look at the tariff rates mentioned below which would be applicable from June 16 for the fiscal year 2019-2020:
- Below 1000 cc segment
The recent TP tariff rate will be either Rs. 2,072 or 12% from the existing price of Rs. 1,850.
2.Ranging between 1000 cc to 1500 cc
Under this category, the hike has significantly increased by 12.5% to Rs. 3,221.
3.Above 1500 cc
Ideally, the TP rates for cars with an engine capacity above 1,500 cc is Rs. 7,890.
4.Less than 75 cc
Under this category, the TP rate is Rs. 482
5.Ranging from 75 cc to 150 cc
For cars with an engine capacity ranging from 75 cc to 150 cc is Rs. 752.
On any new purchase, there’s definitely no escape from paying extra charges. However, you can also save a little if you compare vehicle insurance and invest in the right plan. We, at, Bajaj Allianz provide you with not only a car insurance policy to suit your requirements but also add-on covers to enhance the value of your policy. The addition of these add-ons to your premium can be determined with the help our online motor insurance premium calculator .