30 May 2025
If your car insurance feels oddly affordable in 2025, that's because it is. At least, on the third-party front.
But not for long.
"We're due for a hike soon," cautioned Varun Dua, founder and chief executive officer of Acko General Insurance, referring to third-party motor insurance premiums that have not significantly changed in four years. "Third-party is decided by the government. So, premiums are likely to get slightly more expensive sooner or later."
And this isn't just industry chatter. The Insurance Regulatory and Development Authority of India is widely expected to revise third-party motor premiums, the mandatory portion of your car insurance, this year. As per data from the IRDAl's 2024 Exposure Draft, the cost of third-party claims has been growing at 1 1 —12% annually, driven by rising court awards, accident fatalities, and inflation.
What The Premium Hike Means For You
As of May 2025, the IRDAI hasn't formally released new third-party premium rates, but insurers are preparing for a revision. The last hike came in April 2023 after a four-year freeze during Covid-19 period. However, the increase was minimal, around 3-5% for most car categories. According to the General Insurance Council, claim severity has outpaced premium growth, with loss ratios—claims paid versus premium earned—on third-party business crossing 100% in some segments. This year's hike, if implemented, would correct that mismatch. Expect the cost of insuring your vehicle to rise by a few hundred to a few thousand rupees depending on engine size and car category.
If your car insurance feels oddly affordable in 2025, that's because it is. At least, on the third-party front.
But not for long.
"We're due for a hike soon," cautioned Varun Dua, founder and chief executive officer of Acko General Insurance, referring to third-party motor insurance premiums that have not significantly changed in four years. "Third-party is decided by the government. So, premiums are likely to get slightly more expensive sooner or later."
And this isn't just industry chatter. The Insurance Regulatory and Development Authority of India is widely expected to revise third-party motor premiums, the mandatory portion of your car insurance, this year. As per data from the IRDAl's 2024 Exposure Draft, the cost of third-party claims has been growing at 1 1 —12% annually, driven by rising court awards, accident fatalities, and inflation.
What The Premium Hike Means For You
As of May 2025, the IRDAI hasn't formally released new third-party premium rates, but insurers are preparing for a revision. The last hike came in April 2023 after a four-year freeze during Covid-19 period. However, the increase was minimal, around 3-5% for most car categories. According to the General Insurance Council, claim severity has outpaced premium growth, with loss ratios—claims paid versus premium earned—on third-party business crossing 100% in some segments. This year's hike, if implemented, would correct that mismatch. Expect the cost of insuring your vehicle to rise by a few hundred to a few thousand rupees depending on engine size and car category.
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