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 [4] 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)