Minimum period of motor insurance cover increased from one to three years in India

Owners of new cars are now bound to purchase motor insurance cover for at least three years. The minimum period is five years for two- wheelers. The new law applies to all third party liability motor policies underwritten as of September 1, 2018.

This move must address the problem of non-renewal of insurance contracts. Although motor insurance is mandatory, Indian motorists often fail to renew their policies, a situation that weighs heavily on market revenues.

According to the new directive published on August 20, 2018, motor TPL insurance premiums increase according to the power and the type of vehicle. For private use cars, to get a three-year coverage, premiums will be increased as follows:

• Not exceeding 1000 CC: from 1850 INR (26.45 USD) to 5 286 INR (75.6 USD)
• Between 1000 and 1500 CC: from 2 863 INR (40.94 USD) to 9 534 INR (136.34 USD)
• Exceeding 1500 CC: from 7 890 INR (112.83 USD) to 24 305 INR (347.56 USD).

For two- wheelers, to get a five-year coverage, premiums will be increased as follows:

• Not exceeding 75 CC: from 427 INR (6.11 USD) to 1 045 INR (14.94 USD)
• Between 75 CC and 150 CC: from 720 INR (10.3 USD) to 3 285 INR (47 USD)
• Exceeding 350 CC: from 2 323 INR (33.22 USD) to 13 034 INR (186.39 USD)