The increase in the Third-Party (TP) motor insurance premium would further dent the efforts of the two-wheeler industry to come out of the challenging market conditions, TVS Motor Company said on Monday.
The automobile industry has been impacted by a series of headwinds, leading to a steady increase in two-wheeler prices, TVS Motor Company Director and CEO K N Radhakrishnan said in a statement.
In addition to the pandemic woes, the ongoing shortage of semiconductor chips, high raw material cost, and increasing fuel prices have impacted demand, he added.
“As the customer continues to struggle with an increase in the cost of ownership, the recently announced hike of Rs 2,200 per vehicle in third party insurance cost will further dent the efforts of the industry to recover itself from this challenging market situation,” Radhakrishnan noted.
Further, a strong domestic industry is the basis of global competitiveness and every effort must be made to have a vibrant local market, he added.
The Ministry of Road Transport and Highways (MoRTH), last week, increased the third-party (TP) motor insurance premium for various categories of vehicles with effect from June 1, a decision that is likely to jack up the insurance cost of cars and two-wheeler.
According to the revised rates notified by the MoRTH, private cars with an engine capacity of 1,000cc will attract rates of Rs 2,094 compared with Rs 2,072 in 2019-20.
Similarly, private cars with an engine capacity between 1,000cc and 1,500cc will attract rates of Rs 3,416 compared with Rs 3,221.
Two-wheeler over 150cc but not exceeding 350cc will attract a premium of Rs 1,366 and for two-wheeler over 350cc, the revised premium will be Rs 2,804.
After a two-year moratorium due to the Covid-19 pandemic, the revised TP insurance premium will come into effect from June 1.
Earlier, TP rates were notified by the Insurance Regulatory and Development Authority of India (IRDAI). This is the first time that the MoRTH has notified the TP rates in consultation with the insurance regulator.
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