The Ministry of Road Transport and Highways (MoRTH) has recently issued a draft notification outlining the Motor Third Party Premium and Liability Rules for the Financial Year (FY) 2023-24. This proposal, developed in consultation with the Insurance Regulatory and Development Authority of India (IRDAI), aims to establish fair and reasonable premium rates that adequately cover the risks associated with different vehicle types. The draft notification takes into account various factors such as engine capacity, vehicle weight, and environmental impact. The feedback received from stakeholders will play a crucial role in shaping the final rates, ensuring a balanced and comprehensive insurance framework for the upcoming fiscal year.
Private Cars: Differentiating by Engine Capacity:
The proposed base premium rates for private cars are categorized based on engine capacity. Cars with engine capacities below 1,000 cc would be subject to a base premium rate of Rs 2,094. For cars falling within the range of 1,000 to 1,500 cc, the rate would be set at Rs 3,416, while cars exceeding 1,500 cc would attract a base premium rate of Rs 7,897. This differentiation allows for a more accurate assessment of risk based on the power and performance of the vehicle.
Two-Wheelers: Considering Engine Size:
Similar to private cars, the proposed rates for two-wheelers are determined based on engine capacity. Two-wheelers not exceeding 75 cc would have a base premium rate of Rs 538. For two-wheelers with engine capacities up to 350 cc, the proposed rates range from Rs 714 to Rs 2,804, depending on the specific engine size. This classification ensures that the premium rates reflect the varying risks associated with different types of two-wheelers.
Commercial Vehicles: Addressing Weight and Usage:
For goods carrying commercial vehicles (excluding three-wheelers) with a weight not exceeding 7,500 kg, the proposed base premium rate is Rs 16,049. The rates for vehicles up to 40,000 kg and above would range between Rs 27,186 and Rs 44,242, depending on the specific weight category. This classification acknowledges the increased risks associated with heavier commercial vehicles and enables a fair assessment of their insurance requirements.
Three-Wheelers and Pedal Cycles: A Standardized Approach:
Motorized three-wheelers and motorized pedal cycles (excluding e-carts) would be subject to a proposed base premium rate of Rs 4,492. This standardized approach simplifies the premium calculation process for these vehicle types, ensuring equitable rates for all stakeholders.
Electric Cars and Battery-Based Commercial Vehicles: Encouraging Sustainable Transportation:
To promote sustainable transportation, the draft notification proposes differentiated rates for electric vehicles. For private electric cars not exceeding 30 KW, the proposed base premium rate is Rs 1,780. Cars with power capacities ranging from 30 KW to 65 KW would have a rate of Rs 2,904, while those exceeding 65 KW would attract a rate of Rs 6,712. Battery-based goods carrying commercial vehicles (excluding three-wheelers) would have varying rates based on weight categories, ranging from Rs 13,642 to Rs 37,606. These incentives aim to encourage the adoption of electric and battery-based vehicles, reflecting the government’s commitment to reducing environmental impact.
Discounts and Reductions: Incentivizing Safety and Sustainability:
In addition to the proposed rates, the draft notification introduces several discounts and reductions. Educational institution buses would receive a discount of 15%, recognizing their role in facilitating the education system. Private cars registered as vintage cars would enjoy a discount of 50%, acknowledging their historical significance. Electric vehicles and hybrid electric vehicles would receive discounts of 15% and 7.5% respectively, incentivizing the use of eco-friendly vehicles. Furthermore, a reduction of approximately 6.5% in the base premium rate has been proposed for three-wheeled passenger carrying vehicles, further encouraging their adoption.
Shaping a Balanced Insurance Framework:
The proposed Motor Third Party Premium and Liability Rules for FY 2023-24 aim to establish fair and reasonable rates that adequately cover the risks associated with different vehicle types. By considering factors such as engine capacity, vehicle weight, and environmental impact, the government seeks to create a comprehensive insurance framework. The feedback received from stakeholders will play a crucial role in shaping the final rates, ensuring that the insurance system promotes safety, sustainability, and affordability for all vehicle owners.
