If you own a small car, chances are that from April onwards you may have to shell out more for third-party insurance, compared to bigger ones.
Riding on the back of increased average compensation paid as death claims in case of small cars than the big ones, the Insurance Regulatory and Development Authority of India (IRDAI) on Tuesday proposed a 107.79% hike in third-party insurance premium for small cars (less than 1,000cc) from April onwards.
Simply put, owners of cars including Alto 800 and Tata Nano will pay Rs 426 more as premium than owners of cars above 1000cc such as Wagon R or i10, once the proposal kicks in.
The insurance regulator has invited comments of stakeholders on the draft on revision in premium rates for motor third-party insurance covers for 2015-16 by March 20, 2015, before initiating a formal notification.
It has also proposed a marginal increase in premium for two-wheelers in the range of 14-32% for vehicles with engine capacity of 75-350cc, and a decrease of about 61% in premium for vehicles with engine capacity of over 350cc.
For trucks used as public carriers, the third-party premium has been proposed to be reduced by around 14% for vehicles with a gross vehicle weight (GVW) not exceeding 7,500kg and 20% for vehicles with GVW of over 7,500 kg but less than 12,000 kg.
Average death claims paid in 2012-13 stood at Rs 545,174 and at Rs 609,152 in 2013-14.
IRDAI said the death claim size on policies issued during 2014-15 and 2015-16 would be settled over the next 8-10 years is expected to be higher.
The regulator has arrived at the average, taking into account the number of claims paid over Rs 100,000 and not those claims where the settlement is less than Rs 100,000.