New Delhi: Premium for your car/bike insurance may come down starting from the financial year 2020-21 as the Insurance Regulatory and Development Authority (IRDA) is considering a proposal to stop the practice of fixing of the premium for third party insurance, the Times of India reported.
As of now, IRDA announces the fixed premium for third party insurance cover which remains same for all insurers. If the insurance regulator discontinues this practice, insurance companies will be able to offer discount on the third party insurance premium making their product attractive for buyers amid competition in the industry.
Worth mentioning here that third party insurance is compulsory for all vehicles that run on the road. For the current financial year, IRDA has increased third party premium by nearly 28 per cent following which transporters have been demanding to roll back the steep hike in premium. They are also demanding that the regulator fix the cap for premium and allow insurance companies to offer discount which will give wider choice to policy-buyers, the daily said.
The ToI report citing officials mentioned that the matter came up for discussion last week when the PMO held a meeting on the demand of truckers to roll back the steep increase in premium for the current fiscal.
“The regulator said they can’t do anything now since eight months of the current financial year have already passed. So, there was proposal if they could limit next year’s hike to 10% or 10.5% and notify the increase early rather than waiting for March-end,” the ToIreport quoted the official as saying.
It may be noted that there is no fixed premium for “own damage” due to which insurance companies offer a huge discount on this part.