Car Insurance Premium Needs to be Regularly Paid

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. 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.

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.

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: 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.