North India Statesman
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Third party motor insurance can be expensive. After IRDAI, now the Finance Ministry is also in favor of increasing the premium of motor insurance. Giving more information on this, Yash Jain of CNBC-TV18 said that the Finance Ministry seems to agree on the increase in third party motor insurance. IRDAI and the Ministry of Roads have recommended a premium increase of 18 per cent. This increase in some categories can be 20 to 25 percent. Proposal to increase insurance is possible in 1-2 weeks.
The road ministry will propose to increase the insurance rates. If the proposal of the Ministry is approved, the draft notification will be issued, after which public suggestions and review process will begin. Only then will these new rates be applicable.
Experts say an 18 percent premium increase can improve the joint ratio of insurance companies. This increase can improve the joint ratio of insurance companies by 4-5 percent. Motor Third Party Insurance Policy is mandatory. There has been no increase in the motor third party premium for the last 4 years. Third party premium in total motor insurance is 60 percent.
Motor third party loss ratio
Looking at the motor third party loss ratio, the Motor Third Party Loss Ratio of ICICI Lombard was 64.2 per cent in FY 2025. At the same time, Go Digit’s motor third party loss ratio for FY 2025 was 64.2 percent. At the same time, the Motor Third Party Loss ratio of New India Assurance for FY 2025 was 108 percent.
What is third party insurance?
Third party insurance is an insurance that compensates for the damage done to a third person from a vehicle. It is legally mandatory in India. In simple words, if your car damages someone else’s car, shop or property or a passerby is injured, then third party insurance compensates for this loss. This insurance does not cover your own vehicle or body damage. For this you need extensive insurance.
