The Government of India has recently proposed new base premium rates for third-party motor insurance for various categories of vehicles in the fiscal year 2023-24. This move comes as part of the Ministry of Road Transport and Highways’ efforts to update and streamline the insurance regulations in the country.

Understanding the Draft Rules

The draft Motor Third Party Premium and Liability Rules for FY24 have been prepared in consultation with the Insurance Regulatory and Development Authority of India (IRDAI). These rules aim to establish the base premium rates for different types of vehicles, including two-wheelers, passenger cars, and commercial vehicles.

The proposed base premium rates for private cars below 1,000 cc are Rs 2,094, while for cars between 1000-1500 cc, the proposed rate is Rs 3,416. Cars exceeding 1500 cc will have a base premium rate of Rs 7,897. The rates for two-wheelers vary based on their engine capacity, with those not exceeding 75 cc having a proposed rate of Rs 538, and those up to 350 cc and above having rates ranging from Rs 714 to Rs 2,804.

Proposed Rates for Commercial Vehicles

The draft rules also outline the proposed base premium rates for various categories of commercial vehicles. Goods carrying commercial vehicles (other than 3-wheelers) not exceeding 7500 kg will have a proposed rate of Rs 16,049. The rates for vehicles up to 40,000 kg and above will range from Rs 27,186 to Rs 44,242. For motorized three-wheelers and motorized pedal cycles, the proposed rate is Rs 4,492.

Electric Vehicles and Hybrid Vehicles

The draft rules also consider the promotion of electric vehicles (EVs) and hybrid electric vehicles (HEVs) by offering discounts on the base premium rates. Private e-cars not exceeding 30 KW will have a proposed rate of Rs 1,780, while those between 30 KW and 65 KW will have a rate of Rs 2,904. E-cars exceeding 65 KW will be charged a base premium rate of Rs 6,712. The proposed rates for e-two wheelers range from Rs 457 to Rs 2,383, depending on their power capacity.

Special Discounts and Reductions

To encourage certain categories of vehicles, the draft rules propose discounts on the base premium rates. Educational institution buses will receive a 15% discount, while private cars registered as vintage cars will enjoy a 50% discount. Electric vehicles and hybrid electric vehicles will receive discounts of 15% and 7.5%, respectively. Additionally, a reduction of about 6.5% in the base premium rate has been proposed for 3-wheeled passenger carrying vehicles.

Seeking Stakeholder Feedback

The Ministry of Road Transport and Highways invites comments and suggestions from all stakeholders regarding the draft Motor Third Party Premium and Liability Rules for FY24. The ministry encourages feedback within a period of thirty days to ensure a comprehensive and inclusive finalization of the rules.

Conclusion

The proposed draft Motor Third Party Premium and Liability Rules for FY24 showcase the government’s commitment to updating and streamlining the insurance regulations for motor vehicles in India. With the aim of establishing base premium rates for different categories of vehicles, including private cars, commercial vehicles, and electric vehicles, these rules seek to create a fair and transparent system that benefits both vehicle owners and insurers. The government’s efforts to encourage the adoption of electric vehicles and provide discounts for certain categories of vehicles further highlight its commitment to sustainable and inclusive growth in the automobile sector.