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.
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