According to the Motor Vehicles Act of 1988, to drive any vehicle in India, it is necessary to have four-wheeler insurance, especially third-party liability insurance. While the majority of people nowadays prefer to buy comprehensive car insurance as it provides the whole and extensive coverage to the car, car owner, and the third party.
However, if we talk about the cost of third-party insurance, you must know that it is decided by the IRDAI, not the insurance companies. And recently, the Ministry of Road Transport and Highways and IRDAI updated all the third-party insurance rates, which affect all vehicle categories.
So let’s learn more about the concepts regarding third-party car insurance and premium rates for third-party car insurance to grasp your insurance premium better, whether you are purchasing a new policy or renewing an existing one.
What Is Third-Party Insurance?
Third-party insurance is an insurance policy that provides coverage against third-party liability, such as personal injury or property damage. Buying third-party car insurance online protects the policyholder from any legal liabilities or damages that may arise due to a third party’s actions. It also reduces the financial burden on the provider by providing third-party insurance coverage for damage caused to third parties’ property or people.
What Is The Premium For Third-Party Insurance With No Upper Limit?
Third-party insurance with no upper limit provides unlimited coverage for the damages of injuries caused to a third party, and the premium for third-party insurance with no upper limit on liability means the cost of the insurance policy offers unlimited third-party cover in car insurance for any third-party liabilities. The premium for third-party insurance policies with no upper limit on liability is higher than the regular third-party insurance policies, as they provide unlimited coverage for any legal liabilities that may arise due to a third party’s actions.
Key Highlights of Ministry of Road Transport and Highways Notification
In a notification dated May 25, 2012, the Ministry of Road Transport and Highways announced the publication of the Motor Vehicles (Third Party Insurance Base Premium and Liability) Rules, 2022. It was done in cooperation with India’s Insurance Regulatory and Development Authority. The regulations will take effect on June 1, 2022.
The regulations above have announced the base premium for third-party insurance with unlimited liability for various vehicle classes. In addition, the guidelines above also permit the following premium discounts:
- A 15% discount has been made available for buses used by educational institutions.
- A private vehicle registered as a vintage vehicle is now eligible for a 50% premium discount.
- The premium for electric and hybrid electric vehicles, respectively, has been reduced by around 15% and 7.5%.
Base Premium For Vehicles Per The New Rules
| Category | Vehicle Type | Rates (₹) |
| (1) | PRIVATE CARS | |
| Not exceeding 1000 cc | 2,094 | |
| Exceeding 1000 cc but not exceeding 1500 cc | 3,416 | |
| Exceeding 1500 cc | 7,897 | |
| (2) | TWO-WHEELERS | |
| Not exceeding 75 ccs | 538 | |
| Exceeding 75 cc but not exceeding 150 ccs | 714 | |
| Exceeding 150 cc but not exceeding 350 ccs | 1,366 | |
| Exceeding 350 cc | 2,804 | |
| (A1) | GOODS CARRYING COMMERCIAL VEHICLES (OTHER THAN 3 WHEELERS) | |
| GVW not exceeding 7500 kgs. | 16,049 | |
| Exceeding 7500 kgs but not exceeding 12000 kgs. | 27,186 | |
| Exceeding 12000 kgs but not exceeding 20000 kgs. | 35,313 | |
| Exceeding 20000 kgs but not exceeding 40000 kgs. | 43,950 | |
| Exceeding 40000 kgs. | 44,242 | |
| (A2) | GOODS CARRYING MOTORISED THREE WHEELERS AND MOTORISED PEDAL CYCLES – Public Carriers Except E-Carts | 4,492 |
| (A3) | GOODS CARRYING MOTORISED THREE WHEELERS AND MOTORISED PEDAL CYCLES – Public Carriers Except for E-Carts | 3,922 |
| (B) | TRAILERS | |
| Agricultural Tractors up to 6 HP | 910 | |
| Other vehicles, including Miscellaneous & Special Type of Vehicles (Class-C),(For each trailer, for more, please multiply by no. of trailers) | 2,485 |
Kindly note that insurance premiums are based on various factors and are subject to change. Thus it is recommended to talk to some reliable companies like Tata AIG or other insurance agents or experts to get accurate information.
Penalty For Not Having Valid Third-Party Vehicle Insurance
The penalty for not having valid third-party vehicle insurance differs in different countries. However, in India, if you do not have Third Party Insurance, you face a fine of Rs. 2000 and/or imprisonment for up to 3 months for the first offence. If you do this again, you could be fined Rs 4000 and/or imprisoned for up to 3 months.
In addition, you have to face financial and legal liabilities in the event of an accident. So it is always recommended to fulfil the legal requirement before riding your bike on the road.
Conclusion
Overall the Ministry of Road Transport and Highways and IRDAI regarding third-party car insurance made it easy for vehicle owners to understand the right insurance policy While getting discounts and transparency on premium rates making insurance more possible for everyone. In addition, having an online car insurance policy third party from a reliable company like Tata AIG will allow you to leverage the financial benefits and saves you from legal hassles.
