Advertisement
Friday, Sep 30, 2022
Outlook.com
Outlook.com
Car Review

New Car Insurance To Become Costlier From September 2018

The Supreme Court of India has ordered that every new car should come with a mandatory 3-year third-party cover

New Car Insurance To Become Costlier From September 2018
New Car Insurance To Become Costlier From September 2018
outlookindia.com
2018-07-24T13:16:36+05:30

The Supreme Court of India has ordered that all new vehicles, including four-wheelers, will have to be sold with a three-year third-party insurance from 1 September 2018. The move is expected to result in a significant hike in insurance prices. At present, a new car insurance includes a third-party cover for one year, which is also the duration of the new car insurance policy.

The reason cited for the change in law is that most of the buyers do not renew their insurance policies after the first year, let alone third-party cover, thus defeating the purpose of the law. As per a report, six crore out of the total 18 crore registered vehicles plying on Indian roads don’t have a valid insurance cover.

A third-party insurance covers anyone other than the driver or the passengers, who has incurred a loss in an accident. That's why the situation is alarming as it leaves such third-party road users vulnerable and prevents them from receiving any compensation in case of a mishap.

Impact on insurance cost

At present, a car in the Swift’s segment attracts a one-year third-party cover of Rs 2863, irrespective of whether it is new or used. So, when buying a car in this segment, the upfront insurance cost, including the mandatory three-year third-party insurance, would go up by Rs 5700. The minimum premium of insuring a brand-new Swift (top variant of petrol engine) at present is Rs 10,000. Effectively, that’s an increase of 50 per cent in the new car insurance policy compared to the existing prices (data based on calculations for Delhi).

For reference, the third-party premium paid for insuring a new Hyundai Creta 1.6 petrol (base variant) is Rs 7890 at present, where the minimum insurance cover amounts to Rs 20,000.

It remains to be seen if insurance companies will offer the mandatory three-year third-party premium along with one-year insurance or bill it separately. There are also chances that insurance companies will start offering a three-year insurance cover for new cars, which would lead to a significant increase in new car prices. At the same time, it would also mean not paying for insurance for the next two years.


Source: cardekho.com

Advertisement

Outlook Newsletters

Advertisement
Advertisement
Advertisement

Read More from Outlook

Lament Of Separation: Songs Of Habba Khatun, Last Queen Of Kashmir, Still Echo In Valley

Lament Of Separation: Songs Of Habba Khatun, Last Queen Of Kashmir, Still Echo In Valley

In happy times and sad, Habba Khatun’s sensuous songs make both young and old emotional. With the never-ending conflict bringing tragedies to every doorstep, Habba’s lyrics of separation amplify their mourning.

How Indian Laws Govern People’s Right To Love And Live

How Indian Laws Govern People’s Right To Love And Live

In India, only those relationships between a man and a woman are considered to be legitimate when there is a marriage between the two.

Kohli Quits Test Captaincy, Leaves Leadership Vacuum

Kohli Quits Test Captaincy, Leaves Leadership Vacuum

Virat Kohli, 33, had recently stepped down as India's T20I captain and was subsequently removed as the ODI captain.

UP Elections 2022: How Congress Is Harnessing Power Of 'Persecuted' Women To Counter BJP

UP Elections 2022: How Congress Is Harnessing Power Of 'Persecuted' Women To Counter BJP

A Mahila Congress leader, who is the face of the ‘Ladki Hoon, Lad Sakti Hoon’ campaign, however, has accused the party of anti-women bias after she was denied a ticket.

Advertisement