 "New motor premia in FY17")
Your motor insurance premium will increase from April 1. One reason is the rise in third-party motor premium. According to guidelines issued by the Insurance Regulatory and Development Authority of India (Irdai), third-party motor premium for private cars with engine capacity less than 1,500 cc will increase by 40 per cent. For cars with higher engine capacity, it will increase by 25 per cent. Third-party motor premium is regulated by Irdai and revised yearly, based on inflation and claims. Third-party insurance covers the owner from third-party liability arising out of accidents and is mandatory for all motor vehicles. While it is possible to buy only third-party cover, it is not advisable.
Another reason for the rise in premia is the increase in service tax, on account of the Krishi Kalyan Cess, introduced in this year's Union Budget. The 0.5 per cent cess will increase the service tax rate to 15 per cent. The premium will depend on the model, year of manufacture and whether it is diesel, petrol or CNG. It varies from city to city. (PREMIA FOR PRIVATE CARS)
A basic motor insurance will include third-party and own-damage coverage. This will offer protection in case of accidents, theft or damage to the car due to natural reasons, etc. In addition, a host of add-on covers are optional and can be bought at additional cost. Some of these are zero depreciation, roadside assistance, engine protector, key and lock assistance, etc. Select based on requirement.
