Rise in premium rates is envisaged for all types of vehicles, including cars, buses and motorcycles, Tasnim reported.
The new annual premium rates can range from 3 million rials ($21.8) to 84 million rials ($613) depending on the type of vehicle.
Third party car insurance is essentially a form of liability insurance according to which, in the case of a road mishap, the insurer is required to compensate the inflicted party for physical or financial loss according to the reimbursement ceiling set by the high council, Financial Tribune reported.
The insurance policy is bought by an insured (first party), from an insurer (second party) for protection against claims by another (third party).
The reimbursement ceiling of the third-party insurance against claims of any injury or life loss to a third person has also been increased from 3 billion rials ($21,900) to 3.6 billion rials ($26,277) this year. The amount is equal to the blood money compensation rate (dubbed diyyeh in Persian) ratified by the judiciary.
In mid-February the judiciary increased the blood money compensation rate by 16.9%.
Reportedly, the blood money in the event of death (by accident) has been set at 3.6 billion rials ($26,277) in the current fiscal. Last year it was 3 billion rials ($21,900).
In addition to coverage against loss of life or injury, third-party insurance coverage for any car damage to the third person, including repair or replacement of a vehicle, is now at least 90 million rials ($657).
The High Council of Insurance has compelled all insurance companies to use the new premium rates for car owners wanting to buy an insurance policy in the current fiscal.
For those who bought a policy in the last fiscal (ended March 20), the new premium rates will come into effect after the expiry of their insurance contract and when they buy a new policy.