Thursday, April 02, 2020
By Kamal Swami
Third-Party Motor Insurance Premium Remains Unchanged In FY 2020-21
Today when every segment of the society is undergoing the brunt of COVID-19, the Indian automobile industry is not exceptional to it. According to the Society of Indian Automobile Manufacturers (SIAM), the industry is already facing the loss of Rs. 2300 crore every day due to strict lockdown situation across the country. Taking a step ahead to protect the industry from further losses, the board of SIAM has urged the Insurance Regulatory And Development Authority of India (IRDAI) to not change the insurance premium for the Financial Year 2020-21. It would be interesting to know that the IRDAI has acceded the request made by SIAM and retains the existing premium rate for the FY 2021.
The support by IRDAI will help in controlling the rate of premium to a huge extent because an increase in the premium would have been thrice of the existing rate. Now the buyers will be required to pay an onetime premium for the next three years. Moreover, it is speculated that the people will continue the practice of social distancing even after the lockdown to control the spread of Coronavirus. Moving ahead, going through the implementation of BS-VI norms from this month, the automobile industry has invested the sum of Rs. 90,000 crore for converting their existing product line-up according to the new orders and therefore expect an improvement in the sales once the situation turns normal.
Acknowledging the support of IRDAI, Mr. Rajan Wadhera, Rajan Wadhera, President, SIAM stated, "We are thankful to the Insurance Regulatory and Development Authority of India (IRDAI) for keeping the Third Party Motor Insurance Premium Rates unchanged for all vehicle categories for the Financial Year 2020-21. This is in line with SIAM's submission to IRDAI on retaining premium rates and, thereby, avoiding an increase in the cost of vehicle acquisition for end consumers."
