Third Party Insurance Rates To Soar Up!


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Third party insurance is going to increase. Cars below 1000 CC is going to suffer a lot. They are going to burn 85% more!

Courtesy: TimesOfIndia.

Come April and your third party (TP) motor insurance will pinch your pocket more. The Insurance Regulatory and Development Authority (IRDA) has proposed a 38.87% weighted jump in TP motor insurance for private cars across all sub classes in the exposure draft for revision of premium.

The revision will hit owners of the entry-level cars — below 1000CC segment — the most as the rise in TP cover proposed for this category is 85%. This high-volume segment includes cars like Alto, Eon, Spark, Nano. The minimum increase — only 1.4% — will be in the 1,000-1500 CC category, which includes Swift, Ritz, Beat, Santro and i10. For over-1500 CC cars, the premium will jump by 43%.

TP premium for commercial vehicles will increase too in most cases. However, in two categories, the premium may come down as well. The weighted average for the proposed increase is around 30% for commercial vehicles.


From 2011, third-party premium price is reviewed annually by the regulator based on various parameters owing to the high loss ratio in the segment.

Unlike own damage insurance, which is optional, third-party motor insurance is mandatory for all car owners — be it private or commercial. The idea behind TP motor insurance is to settle the claims of victims, other than car owners. The own damage insurance covers the car and the owner/driver. The loss ratio in motor (TP) ranges between 120% and 200%, which implies for every Rs 100 premium collected payment ranges between Rs 120 and Rs 200. Sources close to the development said the maximum hike in premium price was proposed in the entry-level category because the accident rate is quite high in this segment. "The number of first-time owners is very high in this (below 1000CC) segment," a source said.

The TP premium was first revised after the new guidelines came out in March 2012. However, it was challenged in the Calcutta High Court, following which IRDA issued an exposure draft asking for comments on the proposed rates. Incidentally, TP claims used to be settled from a TP pool earlier, which was discontinued eight months ago.

Commenting on the new proposals, ICICI Lombard customer service chief Sanjay Dutta said it would help reduce the loss ratio. An official of Oriental Insurance Company also added that it will help reduce loss ratio. However, sources in National Insurance said the high loss ratio in TP is largely due to commercial vehicles, which should have been increased more.
 
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Pay more for car, bike insurance from April 1

Now, if you own a car or a bike, pay more premium for the insurance.

India's insurance regulator, the Insurance Regulatory and Development Authority has suggested that premium rates for vehicles should be increased for third party motor insurance for all vehicles.

For passenger cars not exceeding engine capacity of 1,000 cc, the revised third party premium is proposed to be hiked by 85.30 per cent to Rs 1,453 per annum. For two-wheelers exceeding 350 cc, the premium would go up by 108.14 per cent to Rs 1,415.

For goods carrying vehicles, excluding three-wheelers, with carriage capacity exceeding 40,000 kg, the premium would go up by 313.45 per cent to Rs 53,832 per annum, Press Trust of India reported.

India's insurance industry loses more money in third party insurance than it earns from premium. The IRDA has increased the premium uniformly across all classes of cars. The insurance information bureau, the research agency of IRDA estimates premium collected by insurance compnaies for third party insurance of private cars is Rs 6,500 crore a year. The increase in premium is due to inflation and higher settlement of claims due to accidents by vehicles.

"It is therefore proposed that the sub-classes be clubbed together and a single revision be made for the vehicle class as a whole," M Ramprasad, member, IRDA was quoted as saying in the economic times. "For example, for private cars, the increase would be 38.87% over the previous year's premiums of all its sub-classes".
Pay more for car, bike insurance from April 1 | wheelsunplugged.com
 
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85% is a really big hike for small car owners.
Now it seems people will have take to take just TP insurances.
 
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Third party insurance premium is to go up as much as 20% from April 1 due to increase in claims for accidents.

The increase in premium is the first after three years. “The overall percentage increase in the motor third party portfolio works out to 18.9 per cent. The above rates will be effective from April 1,” IRDA said, according to a report.

Charges for the third party insurance cover as per the notification will go up for two-wheelers, passenger cars and commercial vehicles.

For passenger cars not exceeding engine capacity of 1,000 cc, the revised third party premium is proposed to be hiked by 20 per cent to Rs.941 per annum. For two-wheelers exceeding 350 cc, the premium would go up by 18.30 per cent to Rs.804, the report quoting a IRDA notification said..

For goods carrying vehicles, excluding three-wheelers, with carriage capacity exceeding 40,000 kg, the premium would be Rs.15,035 per annum. There is no increase in case of three-wheelers used for carrying passengers for hire or reward with carrying capacity not exceeding six passengers.

In case of four-wheelers used for carrying passengers with carrying capacity exceeding six passengers for hire, the increase is to the extent of 20 per cent from the existing level.

The earlier hike, which was done in March, 2012, was disputed by the transporters’ association which had fought a legal battle with IRDA and general insurers in the Calcutta High Court. However, after eight months of litigation, the court had passed verdict in favour of the hike, it said.

Earlier in 2012, while asking domestic general insurers to hike the provisioning — capital to be set aside to pay the future claims as it takes years to settle claims under this category — against the third party motor portfolio, the IRDA had assured general insurers that it would allow them to hike the third party motor rates gradually.

The IRDA had dismantled the third party motor insurance pool from April 1, 2011 thereby linking the premium rate with the prevailing market rate.

Vehicle insurance increase from April 1 | wheelsunplugged.com
 
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The rates are again proposed to go up as advised by IRDA [frustration]

Third-party motor cover may pinch, IRDA examines proposal that seeks highest 137% hike for entry-level cars

KOLKATA: Come April, your third party (TP) motor insurance will start pinching your pocket more. The Insurance Regulatory and Development Authority (IRDA) is examining a proposal seeking an almost 50% weighted jump in TP motor insurance for private cars across all subclasses in the exposure draft for revision of premium.

The revision will hit owners of the entry-level cars - below-1,000CC segment - the most as the rise in TP cover proposed for this category is 137%. This high-volume segment includes cars like Alto, Eon, Spark and Nano. The overall increase in the insurance premium, including own damage (OD), will be around 23% for these entry-level cars.

The minimum increase in TP premium - around 23% - will be seen in the above-1,500 CC category, which includes Swift Dzire, Honda City, Vento. For above-1,000CC but lower than 1,500CC cars, the premium will jump by 48%. The overall rise in insurance premium, including own damage, will be below 10% in this category that has cars like Ritz, Swift, Hyundai Santro, i10 and Beat, among others.


TP premium for commercial vehicles will increase too in most cases. However, this will be minuscule as experts feel that being an election year, a steep increase in premium of commercial vehicle will have an impact on commodity prices. IRDA has argued that the rate hike is being proposed because the average claim size for TP has gone up by 27% in different categories.

Unlike own-damage insurance, which is optional, third party motor insurance is mandatory for all car owners - be it private or commercial. The idea behind TP motor insurance is to settle the claims of victims, other than car owners. The own damage insurance covers the car and the owner/driver. Till 2011, there was a TP pool managed by GIC. However, after 2012, the pool was discontinued as IRDA felt that it would lead to better management of TP claims and the loss ratio will come down.

Former IRDA member K K Srinivasan feels that the proposed increase in motor TP premium looks unfair. "In case of private cars up to 1,000 CC, the increase is 137% and for motor cycles of 100-150 CC the jump is 50%. But there is an irony. Indian Information Bureau (IIB) on whose data the increase is based admits in its disclaimer that it has not validated the data and has uploaded the data as validated by the insurance company concerned. It also frankly admits that "there could be errors & omission". Significantly, one of the publication that studied the health insurance reports of IIB a couple of years ago commented that "the reports are riddled with errors," he added.

He pointed out that it is high time that IRDA gives up fixing motor TP premium, giving assured premium increases to insurance companies at regular interval

An official of a public sector general insurer said loss ratio in TP is still quite high. "It is around 80-90% across different categories. Anything beyond 55% means the insurance companies are making losses because around 45% is other expenditure in a policy that includes reinsurance premium," he added.

Source - Third-party motor cover may pinch, IRDA examines proposal that seeks highest 137% hike for entry-level cars - The Times of India
 
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TP claims are so high that it actually eats in to the Government finance pool.So in a way as a responsible citizen we cannot say we will not support the rise. But the issue as all other taxes and funds, we are not pretty sure where the money is going to.
 
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Majority of these claims are fake ones which is a nexus of mafia police and insurance surveyors. Companies and Govt end up paying huge sums.
 
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Third-Party Motor Insurance Up, w.e.f 1-April 2014 : 19-20% Hike for Private Cars

The Insurance Regulatory and Development Authority (Irda) has hiked the premium for third-party motor insurance w.e.f April 1, 2014.

IRDA 2.png

source: Link
 
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Re: Third-Party Motor Insurance Up, w.e.f 1-April 2014 : 19-20% Hike for Private Car

I hope this is only for new insurance and not for renewing the insurance [thinking]
 

bhvm

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Re: Third-Party Motor Insurance Up, w.e.f 1-April 2014 : 19-20% Hike for Private Car

booo! for Indian government.
 
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Re: Third-Party Motor Insurance Up, w.e.f 1-April 2014 : 19-20% Hike for Private Car

I hope this is only for new insurance and not for renewing the insurance [thinking]
Nope, its applicable for all. I renewed it well before time now showroom guys saying, I was following the budget update and as soon as I saw that update, renewed my insurance well in advance. [:)]
 
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Re: Third-Party Motor Insurance Up, w.e.f 1-April 2014 : 19-20% Hike for Private Car

Nope, its applicable for all. I renewed it well before time now showroom guys saying, I was following the budget update and as soon as I saw that update, renewed my insurance well in advance. [:)]

Is it possible to renew insurance before expiry date ?

If answer is YES then I would like to renew it before 23.59 Hrs tonight...

Please reply ASAP... [;)]
 
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PS: Tried to log on to an Insurance company website for renewal of my policy and message displayed is as follows:

UNDER CONSTRUCTION : Application will not be available due to year closing activities. Portal will be up again tomorrow.

[frustration]

:lol!:
 

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