Long-term third-party insurance will see prices for cars and bikes rise

• Published On: 31 August 2018
• 915 Views

The IRDA has made it mandatory for four-wheelers to have a minimum of three years of insurance, while two-wheelers will require a five-year policy.

The Insurance Regulatory and Development Authority (IRDA), the regulatory body for all insurance and re-insurance activities in India, has made it mandatory for all new two-wheeler and passenger vehicles sold from September 1, 2018 to come with a mandatory five-year third-party insurance and a three-year third-party plan, respectively.

The move is in line with the recent decision taken by the Supreme Court. The move is expected to increase prices for two-wheelers and four-wheelers across the country since the cost of insurance is set to double.

For two-wheelers, you may see an increase of around Rs 427 (for 1 year) to Rs 1,045 (for 3 years) on the initial purchase cost for bikes with an engine capacity not exceeding 75cc. Retail prices of some premium two-wheelers (+350cc) and personal vehicles (+1,500cc) will also go up.