Govt proposes no hike in third party motor insurance for FY24

In what could be a relief for vehicle owners, the Ministry of Road Transport and Highways has proposed no hike for third party motor insurance, as per a draft notification. 

The ministry, in its notification, has proposed discounts in various classes of vehicles in the base premium for third party insurance for unlimited liability, which could be a jolt for the insurance industry. 

A discount of 15 per cent has been proposed for educational institution buses, discount of 50 per cent has been proposed for a private car registered as vintage car. A discount of 15 per cent and 7.5 per cent has been proposed for electric vehicles and hybrid electric vehicles, respectively. 

Further, a reduction of about 6.5 per cent in the base premium rate has been proposed for 3-wheeled passenger carrying vehicles. 

The proposed basic premium for auto-rickshaws in 2023-24 is Rs 2,371, which represents a 6.8 per cent reduction from the current rate of Rs 2,539. 

As for e-rickshaws, the proposed basic premium is Rs 1,539, whereas the current rate stands at Rs 1,648. 

According to the draft notification, the third-party premium rates for popular and economic cars remain unchanged at Rs 2,094, and for SUVs, it also remains the same at Rs 7,897.