For a smooth drive
When general insurance tariffs were de-regulated in January this year, there was widespread anticipation that insurance bills would ease and car owners would enjoy better coverage for less. But seven months into the year, there's hardly a reduction barring a few areas where the discounts have increased. On the contrary, the insurance rates have zipped up across many areas. Third-party insurance covers are about 30 per cent more expensive. Though, there's a respite for own damage comprehensive insurance policies (usually more profitable for insurers) which have been granted some discounts due to increased competition. Says Rahul Aggarwal, CEO, Optima Risk Management and Insurance Services: "The covers have remained the same as in the past. It is just that the perception of risk has changed-and insurers are charging different rates for different risks."
Yet car owners are driving home better with a more expanded coverage, not usually given prior to de-tariffing. Insurers are looking towards expanding and improving on existing covers, including options like having a replacement car either for a fixed period or till one's car is back from the garage. Other options such as cars serviced at local mechanics (more cost efficiently) rather than with big dealers will attract lower premiums, but there will be higher premiums charged if one wants the 'depreciation' clause knocked off in case a part needs to be replaced. As of today, the customer pays for the depreciation-in other words, the insurer does not totally compensate for the cost of the product or spare part but deducts the depreciation applicable. Over time, of course, new products are expected to come in car insurance. Says Aggarwal: "Companies are waiting to launch new products."
However, the law has mandated compulsory insurance and garages ensure that newly sold cars go automatically to the insurer they have tied up with-incidentally not leaving the customer with much choice (just in case he has his own preference). However, you could change your insurer the next year.
The Premium Drivers
Premiums differ between companies, models and geographies. Insurers consider various statistics and arrive at the underwriting risks and premium. For example, the Scorpio is highly likely to get stolen in Delhi and therefore attracts a higher risk rating there than elsewhere. Likewise, the Octavia's spares are expensive and so it gets a higher risk rating compared to a Honda Civic. Companies also charge different premiums based on marketing and other overheads along with their own actuarial experience of claims (see What do They Charge?). In all probability, if the risk rating by one company for a car is lower, there's a premium difference.
Insurers are only too happy to cover car insurance, when only nine months back they were averse to this segment in general. With rates going up for third-party insurance, it is a must particularly where the opposite party gets injured or dies.
When Your Car is Stolen
Lodge an fir
A police complaint is a must without which insurance claims are not possible.
Intimate the claim
Convey to the insurers that the car has been stolen. Furnish information such as insurance policy number and the car make and other details as required.
Surveyor investigates
A surveyor investigates from where and how the car was stolen.
Police recovery
The police tries to recover the vehicle. If they don't, they issue a non-traceable report.
Documents required
Vehicle registration copy, FIR copy, transfer papers, the original RC book (if possible), original insurance policy, car keys, a no-objection certificate for transfer, indemnity letter on judicial paper, letter of subrogation on judicial stamp paper.
However, there's also a chance that insurance rates could go up further. "The current prices are still unsustainable for insurers, so you could see prices moving upwards in the future," says Aggarwal. But that may still be some time away. On the other hand, claims for repairs are smooth as insurers offer cashless settlements. Surveyors in leading garages offer a quick service.
The future, however, looks exciting with newer products such as those mentioned earlier. Readers may remember that nearly a decade ago, public insurers eliminated the depreciation option where you get the full cost of the part whatever be the age of the car-as part of a pilot trial, but discontinued the same as it was not found viable.
A comprehensive insurance works best for your vehicle, which covers both own damage and third- party insurance. Owners of second- hand cars sometimes don't opt for insurance because the depreciation of the car that is more than five years old brings little in terms of insurance compensation. Remember that car insurance also covers your vehicle for theft and complete loss. If you are a new driver with a new car, a comprehensive policy can go a long way in seeing that your ride in the car is a smooth one.
