Third-party motor insurance premiums in India could soon see a hike of up to 25%, with the government currently reviewing the pricing structure amid rising claims and inflationary pressures. The review, conducted annually by the Insurance Regulatory and Development Authority of India (IRDAI) in consultation with the Ministry of Road Transport, could impact both private and commercial vehicle owners.
If implemented, this would mark one of the steepest increases in recent years, aimed at aligning premiums with the growing cost of claim settlements, vehicle repairs, and court-awarded compensations. Two-wheelers, passenger cars, and goods carriers are likely to be affected differently based on risk classifications and historical loss data.
Insurers have welcomed the possible revision, citing improved sustainability for motor portfolios. However, industry experts warn that higher premiums may burden low-income vehicle owners and increase uninsured vehicles on the roads.
The final notification is expected soon and could reshape pricing dynamics in India’s motor insurance segment.
