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Motor Insurance will soon get costlier. Car and bike owners will have to pay about 10% more on their policies, where truck owners will have to pay about 80% extra under the new structure proposed by the IRDA. 

Insurance Regulatory and Development Authority (IRDA) has published new tariff for the third party motor insurance. Third party insurance compensates vehicle owners from third party liability which is mandatory to purchase by all vehicle owners.  

IRDA, however yet announce the date from which tariff comes into force. IRDA has asked its stakeholders to submit their written views and comments latest by January 17, 2011 so that it can accordingly implement the new price structure.  

IRDA has force to revised rates on third party motor insurance premium to wipe out current deficit in motor insurance sector. 

The premium for private vehicles will rise; it will not be as steep as that for trucks. For a sub-1000cc vehicle, the increase will be from Rs 670 to Rs 740, while for cars up to 1500cc the premium will rise from Rs 800 to Rs 880. In the case of trucks weighing up to 7500 kg the premium will go up from Rs 5,580 to Rs 10,040.   

IRDA also recommends to the government that concept limited liability which should be reintroduced. Regulator also looking limits the claim filling period. Third party insurance is the only business where rates are fixed by the regulator.  

Motor Insurance polices where premiums are fixed but connected liability is unlimited, as claim are paid on the basis of compensation awarded by MACT.  

In insurance sector, motor insurance business where claim ratio is very high, this is why IRDA is looking for making changes to reduce the deficit in Motor Insurance Sector.

Know more about Motor Insurance Policies in India.