Motor insurance is a legal necessity in India in 2025. Third-party motor insurance protects others if you’re at fault in an accident, and it’s mandatory under the Motor Vehicles Act. Recently, proposals have emerged that could increase third-party premiums. If you own a car or bike, these changes will affect your renewal cost, when you purchase a new vehicle, or when you transfer ownership. It’s vital to understand what’s coming, how much more you might pay, and how to prepare smartly for Motor Insurance in 2025.
Motor Insurance in 2025: What’s Changing in 2025
- Proposed Premium Hike
Third-party motor insurance premiums are likely to increase by around 10% on average. Some categories may see larger hikes — especially commercial vehicles and high-risk zones. - Why insurers are considering the increase
- Rising accident-related compensation.
- Higher hospitalisation and vehicle repair costs.
- Greater claim frequency, especially in urban centres.
- Segments that are more likely to be affected.
- Private cars with smaller engines may see moderate increases.
- Commercial vehicles and taxis are likely to face larger hikes.
- High-performance two-wheelers may also see an impact.
- Timing of Changes
The proposed hike is expected to occur around late 2025 or early 2026, depending on final regulatory approval.
Motor Insurance in 2025: What This Means for Vehicle Owners
- Higher renewal costs: Expect to pay more at the time of renewal.
- Budgeting for insurance becomes more critical: For families with multiple vehicles, the extra cost can add up.
- Long-term TP policies: For new vehicles, long-term third-party cover is mandatory (3 years for cars, 5 years for two-wheelers) which means paying upfront.
- Policy comparisons will matter more: Even small differences in premium can be significant when costs rise.
How to Minimise the Impact
- Renew early to lock in current rates.
- Maintain a clean driving record to avoid surcharges.
- Select add-ons wisely — only what you truly need.
- Compare policies across multiple insurers to find the most cost-effective option.
- Consider long-term policies if buying a new vehicle.
How KaroInsure Helps You Stay Ahead
With KaroInsure, you don’t have to track every regulatory update yourself. The platform provides:
- Receive timely alerts when premium hikes are announced.
- Side-by-side comparison of policies across insurers.
- Clear understanding of what third-party cover includes.
- Access to long-term policy options for both cars and bikes.
- Renewal reminders and assistance with claims.
Conclusion
The proposed increase in third-party motor insurance premiums is more than just a headline — it directly affects every car and bike owner in India. While a 10% rise may sound small, its impact is bigger when applied over multiple years or for families with more than one vehicle. Renewing early, comparing policies, and using KaroInsure’s tools help you stay ahead of changes and ensure full protection without overspending.
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