The Insurance Regulatory and Development Authority's (IRDA) move to jack up third-party premium rates in the new, detariffied regime beginning January is being opposed by car owners associations.
Truck operators have warned of launching a nationwide agitation if insurance rates go up following the detariffication of premiums, which is expected to hurt them the most.
While the general insurance industry will be freed from price controls from January, following detariffication, third-party motor insurance premiums will flare, as the IRDA will set up a motor insurance pool, to underwrite third-party covers.
For cars with cubic capacity above 1,500cc, the third-party premium will zoom by over 250 per cent to Rs2,500, from Rs700 at present. For commercial vehicles, the premiums will go up by 150 per cent.
The Western India Automobile Association (WIAA), a car owners' lobby, has asked the IRDA to reconsider the decision. According to Nitin Dossa, executive chairman, WIAA, about 60 per cent of private cars do not go out of Mumbai. Cars also do around 750 km a month, as against 7,500 km a month for trucks.
While the insurance premium on private cars have gone up by 70 per cent, premiums on commercial vehicles – including trucks, buses and other vehicles – has been frozen for years, because powerful associations threaten to go on strike every time insurance firms decide to raise the premiums, he adds.
Dossa says that the WIAA had written to the IRDA, but has had no response. Third-party premiums are being increased as it is felt that the rates for own damage will be reduced, and overall premiums will also fall significantly in the detariffied regime.