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Old 29th March 2013, 20:22   #1
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Exclamation Third Party Insurance Premium to go up W.e.f 1st April 2013

The Insurance Regulatory Development Authority (IRDA) is all set to hike the Third Party insurance premium with effect from 1st April 2013.

Third Party Insurance Premium to go up W.e.f 1st April 2013-tp-rate.png

Quote:
A maximum increase of 20% in third party premium has been allowed for private cars, cabs and the goods carrying vehicles-public carriers while the increase of the same for two wheelers would be little over 18%.

However the insurance regulator has reduced the third party motor premium for goods carrying vehicles-private carriers by 1.3% as compared to the current rates.
Source:

Business Standard

Old Rates Detailed Schedule

New Rates Detailed Schedule
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Old 1st April 2013, 14:25   #2
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

Can someone help me suggest what should be done?

My Ford Fiesta Car Insurance expired on 31st March 2013. I have got my new insurance cover note issued by Bharti AXA on 30th March 2013. I chose them because they were the one quoted the best premium by about Rs. 1500/- difference. I chose to call the agent "CARNATION" and handed over the Cheque on Saturday, 30th March 2013 and took the Cover Note.

Today I got a call from them saying that there was some mistake in the calculation and they need Rs. 1400/- more for processing the policy.

I politely refused and said if there is a mistake, the person who did the mistake has to bear the cost and not the other party and in this case "CARNATION" should bear it. The guying started pleading that it would be cut from his salary and I didn't believe that Carnation would do it.

Then I called up directly Bharti Axa and explained the issue. They said that they hadn't got the cover note yet to process the policy and they would not accept it if the amount is charged less than their actual calculation.

I want to know whether they can really do this after giving me a cover note ? Aren't they legally bound to hounour what is stated in the cover note and signed by them only and not by CARNATION?

Please throw light if you know.

Ramesh
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Old 1st April 2013, 15:39   #3
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

The policy on my jeep is from 23rd December, 2012 to 22nd Dec, 2013. Its a third party policy.

If the rates have been revised from 1st April, 2013, do we have to pay the difference and get it endorsed on the policy ?

KD
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Old 1st April 2013, 15:57   #4
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

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Originally Posted by kd7202 View Post
The policy on my jeep is from 23rd December, 2012 to 22nd Dec, 2013. Its a third party policy.

If the rates have been revised from 1st April, 2013, do we have to pay the difference and get it endorsed on the policy ?
Please check the IRDA website given in the opening post. The third page of the notification reads as follows; I guess it implies that only fresh renewals will be done as per the revised rates.

Third Party Insurance Premium to go up W.e.f 1st April 2013-untitled.png
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Old 1st April 2013, 16:12   #5
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

Guys... I renewed my policy this weekend. Based on my understanding let me put up a few notes here.

1. If a new rate has been announced on a particular date, 1st Apr in this case, then that rate is applicable to all the policies renewed in effect from that date. This automatically means that if your policy came in force before that date then the old rates will apply. Period.

2. If your old policy expiry date falls any day on or after 1st Apr and you renewed it much before the due date (say in Mar) when the new rates were not known you will still receive a payment due notice from the insurance company and you will need to honor that due payment for your policy to be in force. Remember, an early renewal is not equal to the change in date on which your new policy comes in force. It will still be issued to you as being enforceable from the next date to your old policy's expiry date.

3. The most interesting part. There is something cooking up with this TP cover. I have a fixed insurance guy who does the renewals on all my vehicles. He initially issued me a quote in the afternoon and then reverted back in 2 hours with a new quote that was substantially lesser than the previous one. He also called me up to inform this (though I had not seen the previous one till then). His explanation was that apparently the TP premium has been lowered from what was initially announced and there was a mail to that effect in his email box from his boss. Only that he missed seeing it before he sent me the quote as he just returned back to office after 2 days of leave. He sprinted to send me a new quote as soon as he saw that email.

Hope that helps.

Last edited by Zappo : 1st April 2013 at 16:14.
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Old 1st April 2013, 16:27   #6
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

I don't really understand the cause behind increasing the third-party insurance rates.

Is there anyone in this country who claims for third party insurance??
In the case of accidents money is generally handed over unofficially by the offending party, and in case one has to go through third-party insurance it will mean filing an FIR and following up lengthy court proceedings.
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Old 1st April 2013, 16:48   #7
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

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Originally Posted by srameshdelhi View Post
Then I called up directly Bharti Axa and explained the issue. They said that they hadn't got the cover note yet to process the policy and they would not accept it if the amount is charged less than their actual calculation.
You should have reviewed it online, that way its faster then the manual process.

Quote:
Originally Posted by Zappo View Post
G
2. If your old policy expiry date falls any day on or after 1st Apr and you renewed it much before the due date (say in Mar) when the new rates were not known you will still receive a payment due notice from the insurance company and you will need to honor that due payment for your policy to be in force. Remember, an early renewal is not equal to the change in date on which your new policy comes in force. It will still be issued to you as being enforceable from the next date to your old policy's expiry date.
Are you sure about the point 2. My policy was expiring on 22 April 2013 and Bajaj Allianz called me and update me about the increase in TP rates, and suggested i renew before March 31 to avoid it.

I renewed the policy online and got the soft copy of the policy cover letter immediately and the full policy will arrive in a weeks time.

Do you reckon i will have to cough up some more money very soon?
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Old 1st April 2013, 16:48   #8
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

While you have a point Eagleeye, that most private vehicle owners have a YP cover as it is unlawful to have a vehicle on road without insurance, however, the increase in policy premiums I'm given to understand is due to the large scale a many a times unscrupulous ways thagt the commercial vehicle owners use this to make claims. Unfortunately the law abiding ones also have to bear the brunt of this increase.
It would have been better if we had the new premium rates kicking in only on the next renewal after a claim is made , that would have been a fairer way to introduce the new rate slabs.
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Old 1st April 2013, 17:22   #9
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Smile Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

Quote:
Originally Posted by mayankjha1806 View Post
I renewed the policy online and got the soft copy of the policy cover letter immediately and the full policy will arrive in a weeks time.
Do you reckon i will have to cough up some more money very soon?
IMO you would not have to. My Activa's policy expires on 7th April, but I renewed it in the second week of March with old TP rates and they have issued me the policy with the old premium rates. I dont think they would ask for the difference, not that the difference is my case would be very big amount but still.
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Old 1st April 2013, 18:26   #10
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Default

Another interesting point to note:


Two of my vehicle insurance policies are due for renewal in May 13. I kept getting marketing calls from agents using the TP rate hike as a USP to convince me renew the policies before March 31, 2013. But I did not fall for their call.

Going by what Zappo says... I would have blocked my funds for two months without any purpose had I renewed early.

Last edited by Warwithwheels : 1st April 2013 at 18:27.
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Old 1st April 2013, 18:28   #11
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

Dear Mayank Jha,

Bharti Axa has not updated my Cover note yet for me to check out on online the status.

Regarding other comments, I do not think it is logical and practical for Insurance Companies to approach the customers again after issual of Policy asking for more money. What if the guy is not contactable, gone out of country, etc etc or the inefficient company missed to collect. Does it become a duty of cutomer to go and top up the amount. I doubt that IRDA will come out with such a rule which is not practically implementable and create confusion.

I will post you after few days what stand the Agent/Bharti Axa took in my case.

Ramesh
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Old 1st April 2013, 18:40   #12
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

Quote:
Originally Posted by mayankjha1806 View Post
Are you sure about the point 2. My policy was expiring on 22 April 2013 and Bajaj Allianz called me and update me about the increase in TP rates, and suggested i renew before March 31 to avoid it.

I renewed the policy online and got the soft copy of the policy cover letter immediately and the full policy will arrive in a weeks time.

Do you reckon i will have to cough up some more money very soon?
I think there is a pretty fair chance of this happening. And my understanding is based on what my insurer guy explained to me. It sounded fair to me. He wanted to know why I was in such a hurry to renew as my car's policy is in force till April 22. I told him that I dont want to shell out more after March 31. As a matter of fact one Bajaj Allianz agent had sown this seed in my mind since he sent me an unsolicited quote and wrote at the bottom, in bold, red color that this quote is only valid till March 31 as the rates are going up after that.

This is when my insurance guy got the gist of the matter. His point was, never will it happen that the new insurance coverage date overlaps with the older one. You can not have two overlapping policies for the same vehicle. And if the new policy goes into the system as from a date beyond Apr 1st, it will automatically get flagged for a due amount and a notice will be sent out to the policyholder once the new rates are updated in the system, irrespective of when it entered the system.

I guess, that Bajaj Allianz trick was pulled by the agents to meet their financial year targets.

Quote:
Originally Posted by ghodlur View Post
IMO you would not have to.
Possible... but for a different reason. What I understood is that the TP rates were known to most agents by middle of March. So most quotations for April onward policies were being anyhow given with the new TP rates in consideration. So you may not have to pay anything on top.

Twist in the tale - As per my insurance agent, many of the policies were issued with the new TP rates and then there has been a change in the last two-three days of March because of which the policy quotations suddenly became lower. Such people who paid more on the TP part of the premium are actually eligible for a partial refund.
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Old 6th April 2013, 22:00   #13
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

Quote:
Originally Posted by Zappo View Post
Guys... I renewed my policy this weekend. Based on my understanding let me put up a few notes here.

1. If a new rate has been announced on a particular date, 1st Apr in this case, then that rate is applicable to all the policies renewed in effect from that date. This automatically means that if your policy came in force before that date then the old rates will apply. Period.

2. If your old policy expiry date falls any day on or after 1st Apr and you renewed it much before the due date (say in Mar) when the new rates were not known you will still receive a payment due notice from the insurance company and you will need to honor that due payment for your policy to be in force. Remember, an early renewal is not equal to the change in date on which your new policy comes in force. It will still be issued to you as being enforceable from the next date to your old policy's expiry date.

3. The most interesting part. There is something cooking up with this TP cover. I have a fixed insurance guy who does the renewals on all my vehicles. He initially issued me a quote in the afternoon and then reverted back in 2 hours with a new quote that was substantially lesser than the previous one. He also called me up to inform this (though I had not seen the previous one till then). His explanation was that apparently the TP premium has been lowered from what was initially announced and there was a mail to that effect in his email box from his boss. Only that he missed seeing it before he sent me the quote as he just returned back to office after 2 days of leave. He sprinted to send me a new quote as soon as he saw that email.

Hope that helps.
I could use some help.

My insurance is with TATA AIG.
Insurance expired on 2nd April 2013

I renewed my Insurance by paying cash on the 18th of March by going to the TATA AIG office in cunning ham road. They issued me a cover note and promised me that I will get the insurance within 7 working days.

Now its been allmost 3 weeks and nothing! I went to their office this Monday asking for an explanation. The manger promised me a resolution with 48 hours. Today is Saturday and I still have nothing.
I have the original cover note which they tell me is valid for 60 days.
Now what do I do ?
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Old 8th April 2013, 13:11   #14
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

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My insurance is with TATA AIG.
Insurance expired on 2nd April 2013

I renewed my Insurance by paying cash on the 18th of March by going to the TATA AIG office in cunning ham road. They issued me a cover note and promised me that I will get the insurance within 7 working days.

Now its been allmost 3 weeks and nothing!
I have the original cover note which they tell me is valid for 60 days.
Now what do I do ?
Do not worry. Yours is a straightforward case. So your policy should be restored to you. Escalate if required. One thumb rule for any valid transaction is to never pay in cash. That's where the problems start.

I can take a guess at what would have happened. The agent would have issued you a cover note and pocketed the cash. For whatever reason he failed to depposit that with his organizations finance team against the policy cover note issued. Unless that happens the Finance will not show that as a valid transaction for the issuance of the policy. Worse still, any claims, if they come up in this period, will bring more grief.

Bottomline - please escalate this issue to teh relevant authorities. There is even an insurance ombudsman in each city who can be tapped if you do not get adequate response from the insurer in a reasonable timeframe.
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Old 8th April 2013, 18:58   #15
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Default Re: Third Party Insurance Premium to go up W.e.f 1st April 2013

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Originally Posted by Zappo View Post
Do not worry. Yours is a straightforward case. So your policy should be restored to you. Escalate if required. One thumb rule for any valid transaction is to never pay in cash. That's where the problems start.

I can take a guess at what would have happened. The agent would have issued you a cover note and pocketed the cash. For whatever reason he failed to depposit that with his organizations finance team against the policy cover note issued. Unless that happens the Finance will not show that as a valid transaction for the issuance of the policy. Worse still, any claims, if they come up in this period, will bring more grief.

Bottomline - please escalate this issue to teh relevant authorities. There is even an insurance ombudsman in each city who can be tapped if you do not get adequate response from the insurer in a reasonable timeframe.
Lesson learned! never pay in cash

There was no Agent! this was directly at the TATA AIG office in cunningham road Bangalore. That was one reason I agreed to pay cash,
They gave me 2 options cash or cheque. NO Credit cards

I shall try shooting a few emails and see what happens.

thanks will keep you all updated.
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