IRDA mandates 5-year third party insurance for 2Ws and 3-year for PVs from September

The Insurance Regulatory and Development Authority (IRDA), the regulatory body for all insurance and re-insurance activities in India, has announced that all new two-wheeler and passenger-vehicle sales starting September 1, 2018 will need to have mandatory five-year third-party insurance and a three-year third-party respectively, in line with the recent decision taken by the Supreme Court.

The move is expected to increase prices for two-wheelers and four-wheelers as the cost of insurance is expected to almost double up. In case of 2Ws the cost is expected to go up from around Rs 427 (for 1 year) to Rs 1,045 (for 3 year) on the initial purchase cost for a two-wheeler with a engine capacity not exceeding 75cc. The move will bump up retail prices of some premium 2Ws (+350cc) and PVs (+1,500cc) see table below –

Commenting on the notification, domestic two-wheeler major Bajaj Auto said this will increase the cost of insurance motorcycles by around Rs 3,000 to Rs 5,000 per motorcycle.

In response to the increase in prices for the insurance, the company has urged customers to avail of its offer on or before August 31, 2018. The offer includes one-year free insurance for customers buying a Platina, Discover, Pulsar 150, Pulsar NS 160 or the V range of motorcycles. Bajaj Auto says customers purchasing these bikes before September 1, 2018 would effectively have a reduced outgo of approximately Rs 4,800 on a Platina and around Rs 8,000 on the Pulsar NS160 on account of the insurance cost.

The company says the offer will not be available from September 1, 2018 onwards. , Additionally customers availing the offer before the new policy kicks in will also benefits from special offers which includes two years of free service for the CT100, Platina, Discover, V and Pulsar brands. In addition, customers of any Bajaj motorcycle in this period will also get a five-year warranty package at no extra cost. To enable customers to take advantage of the offer the company says its dealerships will remain open till 11pm on August 30 and 31 to enable customers to avail of the offer.