If you are planning to get your car insured, it is important
to first understand what car insurance premium is. The calculation of car insurance premium is largely
determined by actuaries of the insurance company. Car prices are increasing
with growing economy and the same is happening with the cost of car repair
making the car insurance valuable.
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 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. 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 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
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. 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: A car insurance premium is the amount
that the insurance provider is demanding to be paid so that the car can be
covered from range of risks, accidents and damages.
