Insurance rates will go up from July 1, but motorists will be startled by the arbitrary rise in premiums
It will be a rude shock for private car owners. You might just have wished that you had taken advantage of the numerous summer offers of buying a new car and getting free motor insurance cover along with it. Come July 1, motor insurance premium for all automobile owners will shoot up and, in some cities, hit the roof.
The worst hit will be motorists in Chennai, Ahmedabad, Mumbai and Madhya Pradesh. They will have to be prepared to dig deeper as under the new tariff policy, the hike in premium rates have risen by as much as 38 per cent to 47 per cent.
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Automobile owners in Delhi, Pune, Bangalore, Hyderabad, Kolkata and Greater Mumbai will be luckier. In these cities, there will be a percentage rise of 3 per cent to 7 per cent. In other state capitals and the rest of India, the hike has been far more moderate, varying less than 1 per cent and, in some cases, even being negative.
A motorist of a Rs 3.8 lakh Matiz with a cubic capacity of 796, registered and insured in Chennai, will have to shell out a premium of Rs 11,887 for the first year. This is 42.17 per cent more than what he would have otherwise paid under the existing tariff at Rs 8,361.
The same model but registered and insured in any of the four metros will also attract a premium of Rs 11,887, but the actual increase would be just 3.44 per cent. This is because a motorist residing either in the four metros, Bangalore or Hyderabad, has in the past been paying a high premium of Rs 11,492 for the first year premium.
The Matiz will attract the same premium (Rs 11,553) in the other states, but here the increase will be just 0.52 per cent over what the motorist was paying under the existing tariff plan (Rs 11,492).
The way the Tariff Advisory Committee (TAC)