Proposed third-party motor insurance premiums for FY 2023-24

There has been no change proposed in the premium rates for third-party motor insurance for FY2023-24, according to a draft proposal by the Ministry of Road Transport and Highways in consultation with IRDAI. The ministry announced the proposed rates via a notification on the E-Gazette website on June 14, 2023.

The government has made it mandatory in India for motor vehicles to get a third-party insurance policy. The Motor Vehicles Act of India, 1988, mandates all vehicle owners to take third-party liability insurance. It is known as "Third Party Cover'' since it offers financial support to a third party rather than the policy holder.

Third-party insurance is available for both commercial and private vehicles.

How it works
Third-party insurance is a policy that the owner of a vehicle buys from an insurance provider to shield him against third-party claims for any harm done to him or his vehicle as a result of accidents, no matter how minor. However, the policy holder (owner of the vehicle) will not receive financial assistance under this coverage.

Third-party motor insurance premium rates for FY 2023-24

According to the Ministry of Road Transport and Highways in a draft notification dated June 14, stated: “These rules may be called as the Motor Third Party Premium and liability rules for the Financial Year (FY) 2023-24.
(2) They shall come into force with effect from ., 2023.
(3) The base premium rates for Motor Third Party Insurance Cover for unlimited liability for the various
classes of vehicles are tabulated below for the Financial Year 2023-24 and beyond, till the time new rates are notified.”

Here is latest third party insurance rates

Private car third party premium rates

Two wheelers third party insurance

New Private Car – Three to Five year premium

Rates for Electric vehicles third party premiums

Long term rates for electric vehicles – private cars and two wheelers

MoRTH regulates the base premium rates for motor third party insurance from time to time in accordance with section 147 of the Motor Vehicles (MV) Act, 1988. The guidelines provide a base premium for third-party insurance with unlimited liability for various classes of vehicles.

Following discounts in premium are also proposed to be allowed in the said rules, according to a Press Information Bureau release issued on June 20, 2023:

• A discount of 15% has been proposed for educational institution buses.
• A discount of 50% has been proposed for a private car registered as Vintage Car.
• A discount of 15% and 7.5% has been proposed for Electric vehicles and Hybrid Electric Vehicles, respectively.
• Further, a reduction of about 6.5% in the base premium rate has been proposed for 3-wheeled passenger carrying vehicles. Comments and suggestions are invited from all stakeholders within a period of thirty days.