If you own a vehicle, your next third-party (TP) premium renewal could be pricier. After four years without a revision, insurers are pushing for the first motor TP premium hike since June 2022 — and this time the numbers are hard to argue with.
Why Now?
TP insurance, which covers injury, death and property damage caused to others, makes up roughly Rs 64,200 crore of India's Rs 1.08 lakh crore motor pool — about 60% of the market. But with no rate increase since 2022, claim inflation has pushed the segment deep into underwriting loss. New India Assurance's motor underwriting loss jumped over 57% year-on-year to Rs 1,297.2 crore in Q1 FY27 alone.
Then came the Supreme Court's June 11, 2026 judgment recognising the economic value of unpaid domestic work by homemakers, with compensation under a distinct 'Loss of Domestic Care' head based on a notional monthly income of Rs 30,000. ICICI Lombard estimates the ruling could raise the industry's motor TP loss ratio by 12-15%, and has set aside an additional Rs 165 crore in reserves. The General Insurance Council has also filed a review petition.
What a Hike Would Cost You
TP is only part of the total motor premium. A 10-15% TP increase would mean roughly a 4-8% rise in your overall bill — about Rs 400-800 more on a Rs 10,000 annual premium. IRDAI is understood to be reviewing tariffs by vehicle category rather than imposing a flat increase, so the impact will vary across segments.
What You Can Do
If you're due for renewal, consider locking in long-term TP cover before rates change — new cars already carry mandatory 3-year TP (5 years for two-wheelers), which insulates you from near-term revisions. And when the new rates land, shop the own-damage component of your policy, where insurers still compete on price.
Sources: Indian Express, NDTV, ICICI Lombard Q1 FY27 commentary (July 27-30, 2026)