Third-party motor insurance premiums could hike in 2022, check how much more you may need to pay

Insurance companies are eyeing to increase the premiums of third party motor insurances.

New Delhi: Insurance companies are mulling a hike in the premiums of third party motor insurances. According to a report by Zee Business, insurance firms have sent a proposal to the Insurance and Regulatory Development Authority of India (IRDAI), requesting the insurance regulator to allow a price hike in third-party motor insurance by 15 to 20 per cent. 

The report also points out that insurance companies were planning to increase the premiums of third party motor insurance before the pandemic. But their plans got delayed as the Covid-19 pandemic hit the country in March 2020.  

More than 25 General Insurance Companies are reportedly hoping to receive a nod from IRDAI to hike the premiums of third party motor policies. The current premium prices are not sustainable, insurers believe. 

Moreover, a rise in the third part of third party motor insurance claims has added to the pressure on the service providers. The increasing refunds and stagnant premium prices are reportedly impacting the revenues of third party motor insurance providers. 

According to the IRDAI’s Annual Report of 2021, third party insurance accounts for 25 per cent of the business for non-life insurance companies. The report also added that companies collected Rs 40,000 crore in third part insurance premiums during the period under review.

The hike in premium prices of third party motor insurances could bring a much-needed respite for insurers. However, an increase in the premiums could put burn a hole in the pockets of the common man. Also Read: Retail inflation climbs to five-month high of 5.59% in December

If the hike is approved by the IRDAI, new vehicle buyers will also have to pay more price on the premiums of the third party motor insurance policies. Also Read: India's industrial production grew at 1.4% in November 2021