The Insurance Board (IB) has reduced the insurance premium rate on private-owned four-wheelers by 30 percent, effective from December 16. The insurance sector regulator’s move follows a significant drop on damages of the private cars. With this revision, the insurance premium is expected to decrease by Rs7,000-Rs12,000 annually.

In a statement issued on Sunday, IB Director Shree Man Karki said they have revised the premium rate to the private motorists under comprehensive coverage of auto insurance policy. “We have reduced the premium rate only for the damages of the private cars based on the small rate of private vehicle accidents,” he said.

The new provision is based on Directive on Motor Insurance Rate 2016 that was amended recently. “However, the provision will not be applied for public vehicles,” Karki clarified, adding that the private motorists were found to be more cautious on minimising the loss of their vehicles.

The board had earlier increased the insurance coverage amount by five fold in the event of death of passengers in vehicle accidents. Similarly, the board had also enforced the third party insurance for the passengers travelling in all types of public and private vehicles.

“In recent days, there has been a growing trend of owning private cars. Almost all car owners insure their vehicles targeting to recover the damage loss incurred in case of any accident,” the board said. According to Karki, the new provision is expected to relieve private motorists without affecting the insurers.