Exclusive | The third-party insurance premium on commercial vehicles could be reduced by 10%

Owners of heavy duty vehicles may soon have to pay a lower insurance premium on third-party liability insurance, as the Insurance Regulatory Authority of India (IRDAI) could consider reducing rates of premium of 10%

. in motorized third party premiums. It is expected that premiums may drop by 10% for heavy vehicles, "said a source familiar with the case Moneycontrol .

A circular to this effect could be issued by the end of this week, the source added.

Representatives of IRDAI and members of All India Motor Transport Congress (AIMTC) met on Saturday to discuss a reduction in the liability insurance premium. The move came after the carriers canceled their national strike Friday night after receiving government badurances to look into the case.

"IRDAI agreed to discuss the request for revision of the premium for heavy vehicles," joint statement issued by the Ministry of Road and AIMTC said.

Also read: threat of strike post by the carriers lobby, IRDAI likely to moderate third party premium

AIMTC had organized a truckers nationwide strike for s & # 39; counter the additional burden of the e-way bill, exorbitant insurance premium amount, soaring fuel prices and the poorly managed toll system. The strike, which lasted eight days, saw nearly 90-92 lakh trucks off the road.

The union had demanded a reduction in the insurance premium after the premium was increased from four to 30% for 2018-2019. 19659002] "Since the annual increase in the third-party insurance premium has continued for 15 years, even after the opening of the insurance sector.To halt the increase by year, we asked the IRDAI to descale it.But the authority did not respond to our request, "said Channa Reddy, president of the Indian Association of Vehicle Owners utilities, at IANS before the strike.

Each year, the bonus of a third party is revised according to a pre-established formula. in the engine capacity and claims experience in this particular segment. Here, commercial vehicles such as trucks and other freight carriers have been found to have the highest amount of claims, which is why premium increases in this space have also been high.

Also read: Road Min Revises Third Party Insurance Formula; fixes the amount "insured" at Rs 5 lakh

For 2018-19, the insurance premium for commercial vehicles with a total gross weight of less than 7,500 kilograms has been set at Rs 14 390, between 12,000 and 20,000 kg set at 32,367 rupees and over 40,000 kg was 21,318 rupees

Liability insurance premium for pbadenger cars and commercial vehicles. Source: IRDAI

Although the meeting took place on July 28, a decision could not be taken due to the absence of President Subhash Chandra Khuntia at the meeting. The president of IRDAI was traveling abroad and the members were waiting for him to take one last call on this subject. The source, however, stated that it could consider the proposal partially

Under the Motor Vehicle Act, 1988 which will be replaced by the Motor Vehicle Act, 2017 soon obliges vehicles to take out liability insurance. Liability insurance clause, the insurance company agrees to pay the insured amount, on behalf of the vehicle owner, to the victim in the event of a serious or fatal accident.

According to Indian law, a victim can claim insurance amount in three ways for a fatal or serious accident. First, under section 140 of the Motor Vehicle Act, dependents can claim up to 50,000 rupees for the death of the victim and 25,000 rupees for permanent disability. Then, Schedule II Liability Insurance provides that a victim was eligible to claim Rs 10 lakh for a fatal accident and Rs 5 lakh for permanent disability (in accordance with the Motor Vehicle Amendment Bill 2016 ). Third, when both parties can fight to settle the amount.