Car prices are increasing with growing
economy and the same is happening with the cost of car repair making the car
insurance valuable. Usually, we all take good care of our cars but car
insurance is binding by law and every car owner should be well versed with the
factors of car insurance premium.
In the exposure draft of Insurance
Regulatory and Development Authority had proposed at least a 60 percent raise
in the car insurance premium in
third party premium for vehicles. As per the industry experts in the car
insurance segment, the 20 percent raise in the car insurance premium is not sufficient to stanch the losses in the
third party motor insurance segment. Even though insurance for own vehicle damage
is profitable, there will be hike in car
insurance premium by around 15 percent as well to counterbalance the losses
in the third party assortment.
Car insurance in India has two
constituents- one covering third party damage in terms of property and the other
covering damage of the own vehicle. The third party coverage is compulsory for
the commercial and personal vehicles and the car insurance premium in this segment is governed by Insurance
Regulatory and Development Authority. Nonetheless, insurance for one’s own
vehicle is not mandatory. As there are many speculations on the car insurance premium rates, according
to the industry experts, a good driver may not get affected by the rise as the
own vehicle damage premium depends on various other variables.
There was a stiff retaliation from
customers and after getting feedback from various stakeholders, the Insurance
Regulatory and Development Authority diluted the hike to 20 percent of all
vehicles. Though the hike of 20 percent wasn’t sufficient considering the
number of claims that are being reported every year, so cutting rates of the
third party cover might be the only superlative solution to the issue.
Summary: Car insurance is set to make an
impressive rise this year, with the regulators increasing the car insurance premium by considerable percent
and insurers also planning to bring their own rates for incisive policies.
