The Center has announced new base premium rates for third party motor vehicle insurance. These revised rates will be applicable from June 1, 2022. These rates were last revised for the financial year 2019-20 and were kept unchanged during the COVID-19 pandemic.

According to a gazette notification of the Ministry of Road, Transport and Highways, the annual rate of third party insurance for private cars not exceeding 1000 cc has been fixed at Rs 2,094, from Rs 2,072 in 2019-20. Under the new rates, third party insurance for private cars with engine capacity between 1000 cc and 1500 cc has been increased to Rs 3,416 from Rs 3,221 in 2019-20. The premium for large private vehicles with engine capacity above 1500 cc will be reduced from Rs 7,897 to Rs 7,890.

Three-year single premium for a new car

The three-year single premium has been fixed at Rs 6,521 for a new car not exceeding 1000 cc, while it has been fixed at Rs 10,640 for a car between 1000 cc and 1500 cc. Under the newly notified rates, a new private vehicle of more than 1500 cc will be insured for three years for Rs 24,596.

Premium for two-wheelers

For two-wheelers above 150 cc but above 350 cc, the insurance premium will be Rs 1,366 while for two-wheelers above 350 cc the premium will be Rs 2,804.

The five-year single premium for two-wheelers not exceeding 75 cc is Rs 2,901, more than 75 cc but not 150 cc is Rs 3,851, and not more than 150 cc but 350 cc is Rs 7,365. Under the new rates, two-wheelers above 350 cc can be insured for five years at Rs 15,117.

Electric Vehicle (EV) 3 years single premium

A new personal electric vehicle (EV) can be insured for three years for Rs 5,543 if it does not exceed 30 kW. If the EV is more than 30 kW but less than 65 kW, the three-year premium will be Rs 9,044. Large EVs above 65 kW will be insured for three years for Rs 20,907.

New two-wheelers (EV) 5 years single premium

New two-wheelers can be insured for 5 years under a single premium of Rs 2,466 if they do not exceed 3 kW. EV two-wheelers above 3 kW but not 7 kW will be insured for Rs 3,273, and above 7 kW but not 16 kW for Rs 6,260. High powered EV two-wheelers with a capacity of more than 16 kW will be insured for five years at Rs 12,849.

What is third-party insurance?

Motor third-party insurance or third-party liability cover is a statutory requirement under the Motor Vehicles Act. This is referred to as a 'third-party' cover because the beneficiary of the policy is a person other than the two parties involved in the contract (the car owner and the insurance company). The policy does not offer any benefit to the insured. However, it covers the legal liability of the insured for third party loss or death/disability of third party property.

It covers third-party liabilities arising out of:

- Property damages
- Damages to the vehicle
- Bodily injuries
- Death of the third party