Third party motor insurance can be expensive. After IRDAI, now the Finance Ministry is also in favor of increasing the premium of motor insurance. On this, with more details, Yash Jain of CNBC-TV18 said that the Finance Ministry seems to have agreed to increase third party motor insurance. IRDAI and Road Ministry have recommended to increase the premium by 18 percent. This increase in some categories can be 20 to 25 percent. Proposal to increase insurance in 1-2 weeks is possible.
The Road Ministry will propose to increase insurance. If the proposal of the ministry is approved, a draft notification will be issued, after which the public suggestion and review process will begin. Only then will these new rates be applicable.
Experts say it is possible to improve the combined ratio of the insurance companies due to increasing the premium by 18 per cent. Due to this increase, it is possible to improve the combined ratio of insurance companies 4-5 percent. Motor Third Party Insurance Policy is necessary. The motor third party premium has not increased for the last 4 years. Third party premium in total motor insurance is 60 per cent.
Motor Third Party Loss Ratio
If you look at the motor third party loss ratio, then in FY 2025, the Motor Third Party Loss Ratio of ICICI Lombard was 64.2 percent. At the same time, Go Digit’s FY 2025 motor third party loss ratio was 64.2 percent. At the same time, the motor third party loss ratio of New India Assurance FY 2025 was 108 percent.
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What is third party insurance?
Third party insurance is an insurance that compensates the loss to a third person from a vehicle. This is legally compulsory in India. In simple words, if your car is damaged by someone else’s car, shop or property or a passerby gets hurt, then third party insurance compensates for these disadvantages. This insurance does not cover your own car or body loss. For this you need a comprehensive insurance.