Two-Wheeler Insurance Premium Hike To Dent Recovery Process: TVS CEO

In addition to challenges due to the pandemic, the ongoing semiconductor chip shortage, high raw material cost and increasing fuel prices have impacted demand.

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TVS Motor Company says the hike in insurance rates will dent the industry's recovery

The hike in third party insurance for two-wheelers announced by the government from June 1, 2022 will further dent the efforts of the industry to recover from the challenging market situation, TVS Motor Company Director & CEO, KN Radhakrishnan has said. The senior TVS official said in a statement released today that the automobile industry has been impacted by a series of headwinds, leading to a steady increase in two-wheeler prices. In addition to challenges brought on by the pandemic, the ongoing shortage of semiconductor chips, high raw material cost and increasing fuel prices have impacted demand, the TVS official said. 

Also Read: Car & Two-Wheeler Insurance Rates Set To Increase From June 1, 2022

"The automobile industry has been impacted by a series of headwinds, leading to a steady increase in two-wheeler prices. In addition to the pandemic woes, the ongoing shortage of semi-conductor chip, high raw material cost, and increasing fuel prices, have impacted demand. As the customer continues to struggle with an increase in the cost of ownership, the recently announced hike of ₹ 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. Further, a strong domestic industry is the basis of global competitiveness and every effort must be made to have a vibrant local market," said Radhakrishnan.

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On May 25, 2022, the government approved the new base premium rates for third party motor vehicle insurance. The revised rates will be applicable from June 1, 2022. These rates were last revised for the financial year 2019-20 and were kept unchanged during the COVID-19 pandemic. Under the revised rates, for two-wheelers over 150 cc but not exceeding 350 cc, the insurance premium will be ₹ 1,366 while two-wheelers over 350 cc will command a premium of ₹ 2,804. Under the new rates, third party insurance for private cars with an engine capacity between 1,000 cc and 1,500 cc has been raised to ₹ 3,416 from ₹ 3,221 in 2019-20.

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