Premium for vintage cars to fall 25%

Insurance companies have decided to reduce the third-party premium for vintage cars by 25 per cent. In a letter to the Irda, K N Bhandari, secretary general of General Insurance Council (the body of general insurance companies), said, "In view of the limited and scare use of vintage cars on the roads, they may be given a special treatment.

These vehicles may be treated as a special category eligible for 25 per cent discount on the third-party premium for private cars."

The Insurance Regulatory and Development Authority (Irda) had increased the premium for private cars with an engine capacity exceeding 1500 cc by 257 per cent at Rs 2,500 in January while deciding the third-party premia for private and commercial vehicles. Earlier, the premium for private cars of such capacity was Rs 700 and vintage cars fall under this category.

"We have made a recommendation to the Irda to decrease the third-party premium on vintage cars by 25 per cent. The Irda is considering it," said Bhandari.

With the discount, the third-party premium for vintage cars works out to Rs 625 from the present Rs 2,500.

The council is also working on setting up a task force of the members of insurance companies to work with regional transport offices to identify uninsured vehicles.

According to the data available, the total vehicles registered in the country are 78 million, of which only 40 million are insured.

According to the law, it is mandatory for all vehicles,except those belonging to the government, to have a third-party liability insurance cover.