Car Insurance Premium Should be Paid without any amiss

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 raise in the car insurance premium in third party premium for vehicles. 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. 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.

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. 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. 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.

Summary: Good care is taken 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

Parts of car insurance

Auto or car insurance is activated by payment of premiums. Premiums are a sum committed against an insurance product after every fixed period of time. It is very important to make regular and timely payment of premium so that there is no lagging in the car insurance. The paid sum gives you the legal right to claim for money to cover your losses in event of accident. To claim finances from an insurance company a person must have regularly paid the premiums and only after minimum number of premiums paid can we make a valid claim. Premiums are fixed depending on the risk associated with car higher the risk higher is the premium to be paid.

Summary:

Payment of premiums is obligation to minimize your financial risks in event of a mishap. The insurance may lapse due to non payment and cause you severe legal penalties in event of mishap.