A Hole in fuel tank
IRDA-triggered motor insurance premium hike a major hit to consumers
WHATISUP BY SAJJAD BAZAZ
After owning a vehicle, the most important thing is to get your vehicle insured. And most of us never bother to look into the insurance product which we are buying to cover the vehicle. The spillover effect of this boom has let the insurance companies also on the growth path through motor insurance portfolio.
Most of the vehicle dealers have tie ups with a particular insurance company that provide motor insurance. Buying a new vehicle usually ends up with the auto dealer pushing the insurance product of his choice just to earn hefty discount for getting volume sales. There could also be instances where you are made to believe that the insurance cover is the main feature of the product that is being sold.
Often, the customer ends up with a product with little knowledge of insurance company as there may not be a choice. There is a conflict of interest in most of these cases as the seller is often a corporate agent or their group entities are insurance brokers.
Now, the cost of maintenance of your vehicle has gone up from this month, as the insurance regulatory authority of India (IRDA) has hiked the third-party motor insurance premiums.
Third party pool has also been dismantled. Earlier in December, the insurance regulator had decided to scrap the common pool used by insurers to settle accident claims. The pool was formed in early 2007 to ensure availability of third-party cover for commercial vehicles that had been refused third-party insurance. The major public and private sector insurance players have been demanding abolition of the third party insurance pool, arguing that the arrangement for sharing claims was denting their profits.
This would mean that all third party claims will be on the Net of insurance companies and is expected to have a huge effect on the overall profitability of the insurer. The IRDA has also asked the insurers to ďensure that motor third party insurance is made available at their underwriting officesĒ.
Under new guidelines the classification of vehicles has been changed. Tractors, Dumpers, Milk vans, Oil & Petrol transport vehicles, Refrigeration/Pre-cooling unit, tankers and Tippers have been placed under goods carrying vehicles. This will mean that the insurance premium of these vehicles will be higher now.
There will also be depreciation on painting as per the age of vehicle. This would mean that the liability of customer will increase a little in case of any accidental loss to the vehicle.
Amid this changing scenario, you need to focus on best deal for insurance cover to your vehicle. There are chances the companies will offer you low rates, but actually the coverage will be not so effective. Always opt only for the mandatory limited liability requirement. Donít rush for smaller claims. If the amount you are going to spend on repairs is lower than the no claim bonus you are likely to accumulate, it is better not to claim the amount. The NCB can enhance your cover by as much as 50%. Donít inflate your premium by opting for add-on options which you may never use. So tally the policy features with your needs. Never feel shy in asking questions to understand the product and its fitness with your requirement.
There are different kinds of vehicle insurance products available. Each insurance company has their own facilities and features of the motor insurance. So, it would be a good idea to compare motor insurance products of different companies before taking up one. It would always be advisable to take up a comprehensive coverage plan that includes insured vehicle, insured party as well as the third party. You should take these things into consideration while you want to buy motor insurance.
Basically, no plan is good or bad, itís only bad or good depending on your requirements. So be an informed and disciplined investor and donít fall prey to insurance gimmicks narrated by agents or motor dealers. Low premium insurance product does not necessarily meet even your basic requirements. However, for further clarity of issues, if any, one should always consult insurance expert.
Lastupdate on : Fri, 20 Apr 2012 21:30:00 Makkah time
Lastupdate on : Fri, 20 Apr 2012 18:30:00 GMT
Lastupdate on : Sat, 21 Apr 2012 00:00:00 IST
- MORE FROM GK MAGAZINE
Srinagar, Apr 20: After much delay, the Election Commission of India (ECI) has set the ball rolling to conduct elections to the four vacant seats of Legislative Council, in which Sarpanchs and Panchs across More
- Srinagar City
Admin does a Jaspal Bhatti at Poloview
GK CITY REPORTER
Srinagar, Apr 20: While locals could be used to such sardonic scenes in this City, visitors for now are equally shocked to see how government monitors developmental activities in this summer Capital, which More
Chairs Durbar Move Review Meeting
Jammu, Apr 20: Chief Secretary Madhav Lal on Saturday asked the Power Development Department (PDD) to ensure that there is no curtailment of electricity in the residential colonies of the move employees More
- South Asia
Okara, Apr 20: President Asif Ali Zardari has said Pakistan there is no possibility of unilateral withdrawal from Siachen. Addressing a gathering of Pakistan Peopleís Party (PPP) workers here, President More
Baghdad, Apr 20: A wave of apparently coordinated bombing and shooting attacks in seven different provinces across Iraq killed at least 38 people and wounded more than 170 today, security officials said More