You'll have to shell out more money next time you go out to buy a scooter or a motorcycle. The Insurance Regulator and Development Authority of India (IRDA) has proposed a hike of up to 40 per cent for car and bike insurance from April 1.
IRDA has ordered this increase due to rise in cost inflation index (CII) by 5.57 per cent as compared to the last financial year. The new third party premium rate for two-wheelers with engine capacity till 75cc has gone up to Rs 569 as against Rs 519. Models falling in the category of 75cc-150cc will see a premium increase of 15 per cent to Rs 619 while there is an increase of 25 per cent for motorcycles falling between 150cc-350cc. However, the premium has been reduced to Rs 884 for motorcycles with engine capacity of more than 350cc.
This increase in insurance premium will increase the cost of ownership of two-wheelers in India. Every year, IRDAI revises premium rates, by studying the number of claims made and loss ratios for the insurers. Motor third-party cover is mandatory for all vehicles and covers liability arising from third-party claims due to accidents.