Insurance companies have raised the premium for cars and other vehicles by as much as Rs 2,000 beginning January 1.

The premium for heavy vehicles has increased to Rs 8,000-9,000 from the earlier Rs 2,940-3,980 rising by 126-150 per cent.

Auto dealers said that the increase pertains only to third party insurance, which provides cover against damages to other vehicles, injuries or death of persons other than owner in the accident.

"Now, if somebody buys a Maruti Alto or Santro he/she would have to cough up Rs 670 against Rs 500 earlier toward the third party insurance. Similarly, for higher capacity cars like Wagon R, Zen Estilo or Hyundai Getz, one would have to pay Rs 800 over Rs 600 earlier," said a car dealer.

In case of luxury car owners, the increase in insurance premium is considerably steep going from Rs 700 to Rs 2,500, car dealers added.

The car in this category includes, Fiesta, Baleno, Civic or any other car, which has engine capacity of more than 1,500 CC, the dealer said.

The premium on insurance cover for owner and vehicles which is called 'Own Damage' Insurance in technical parlance is presently under the review of Insurance Regulatory and Development Authority.