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Old 14th February 2014, 08:55   #1
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Red face Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Come April 2014 , vehicle owners will feel the pinch in their pockets with the proposed Third Party Liability premium to be increased if IRDA has its way. The increase is going to be a whopping 137% for entry level cars i.e less than 1000cc, the category to be worst hit. For 1000-1500cc catergory the proposed increase would be 48% where as for vehicles in more than 1500cc category the increase is seen to be around 23%. Even the bikers arent spared with the increase proposed to be around 50% for bikes in the 100-150cc. The overall increase in the premium is going to be around 23% on average.

Unlike OD which is not mandatory TPL is a mandatory premium to be taken for any vehicle. The only deterrent to this proposed increase is the general elections which may prevent the measure to be taken to avoid being an unpopulist step.

http://timesofindia.indiatimes.com/b...w/30300266.cms
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Old 14th February 2014, 09:20   #2
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

% increase is a good way to lime light.

I am paying Rs 1100 for Swift D as third party liability. So this will become Rs 1650.

Hmm.
I am not sure if it will pinch me so much, since insurance is a yearly affair. That is approximately Rs 50 per month.

But I am not sure, who is going to gain out of it ? The regulator or the third party or the insured or the insurer?

The answer is pretty simple.

Last edited by F150 : 14th February 2014 at 09:21.
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Old 14th February 2014, 10:08   #3
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

All good moves. However, the "benefits" such as they are, never end up getting to the injured parties in a proper manner.
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Old 14th February 2014, 17:49   #4
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

What is the settlement to claim ratio for third party insurance? I believe most people use the first party to repair their vehicles rather than landing into the hassle of claiming third party insurance of others. The hike in third part is simply to:

1. Discourage/ or somehow compensate for fake claims.
2. Good way to increase the revenues as the third party insurance is required by the law.

One may stop taking first part insurance when the vehicle becomes old, but it's illegal to drive without a third party insurance. Hence, its not possible to avoid this hike.

On another note, wasn't the third party premium was hiked last year too by a good margin?
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Old 15th February 2014, 13:41   #5
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

Damn, 3rd party insurance is already ridiculously priced for older cars.

1. My Jeep's 3rd party insurance premium is usually between 3,200 - 3,500. Not a single insurance claim in 16 years of ownership. Book value = zero.

2. Conversely, my City Vtec cost Rs. 7,000 odd for full, comprehensive coverage when its book value was 4 lakhs (or in the whereabouts). The Vtec also didn't have a single insurance claim.
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Old 15th February 2014, 16:50   #6
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

Quote:
Originally Posted by GTO View Post
Damn, 3rd party insurance is already ridiculously priced for older cars.
True, but as you yourself know that it does not pertains to the old (or new) car. It's 3rd party (damage caused by the first party to others) and yes, it is becoming ridiculously expensive. And for cars which are old, paying so much does pain.

The point is that it is being used more like a money making mechanism because it is mandatory by law to have it and one has to pay for it.

Regards,
Saket
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Old 15th February 2014, 18:48   #7
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

This is outright cheating! In the vast majority of cases, 3rd party insurance doesn't get invoked!

Agree with saket. it is all about point #2.
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Old 15th February 2014, 18:48   #8
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

When I attempted to opt for bumper to bumper (zero depreciation) cover for my A-Star AT, I was told that, according to an IRDA rule, vehicles over 3 years of age cannot avail of this cover. I fail to see how the IRDA thought this to be relevant enough to make a rule about it.

If one's vehicle is hit from behind and in turn hits a vehicle in the front (all part of one accident), all insurers are quick to state that they can cover either the front or the back. Why doesn't the IRDA pass a rule about this matter?

It appears to me that the IRDA (like for example, channels like NDTV Profit etc. that function as an official mouthpiece for Corporate Realty providers and seek to gain favour, justify ridiculous pricing and glamourize what are essentially a little better that basic housing projects) has become a tool for insurers to use to implement policies that favour them while manipulating the general public into believing that they are actually looking out for them.
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Old 17th February 2014, 08:48   #9
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Red face re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

Quote:
Originally Posted by sydras View Post
When I attempted to opt for bumper to bumper (zero depreciation) cover for my A-Star AT, I was told that, according to an IRDA rule, vehicles over 3 years of age cannot avail of this cover. I fail to see how the IRDA thought this to be relevant enough to make a rule about it.
Its not an IRDA rule. Its an addon which is issued by the Insurer and IRDA has no control over this. There are Insurance co like Future Generali, Bharati Axa who offer zero dep add on for vehicles upto 5 years.

As per the newlink, IRDA says that the rise in TP claims has risen by 27% across different vehicle categories. Also the TP pool which was managed by GIC till 2011 and later discontinued, now puts the onus of the TPL premium to be calculated by the Insurance co but governed by IRDA. Imagine if the Insurer were given a free hand at fixing the TPL, the insurance premium would shoot the roof.

If interested in statistics. pls check out the document attached.
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File Type: pdf Draft_on_motor_TPL_premium_rates_2014-15[1].pdf (2.90 MB, 499 views)

Last edited by ghodlur : 17th February 2014 at 09:13.
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Old 17th February 2014, 10:35   #10
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

Quote:
Originally Posted by ghodlur View Post
If interested in statistics. pls check out the document attached.
Wiat, what? So a bike like Duke390, the 3rd party premium is reduced by 62%?
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Old 29th March 2014, 08:09   #11
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Default Third-Party motor insurance up, effective 1-April 2014 : 19-20% hike in the Private c

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

Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!-irda.png


The comparison: Old Vs New

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Old 1st April 2014, 12:17   #12
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Red face re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

Renewed the Insurance for my Honda Activa with the old TPL rates before 1st April, still the difference between last year's and this year's Insurance was a whole Rs 5. Hurrah. Thanks to IRDA.
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Old 13th February 2015, 09:10   #13
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Angry re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

Damn!!.

Its not been an year or so since the last hike in Third party Liability premiums, there is a proposal to hike it again in April 2015. Not just limited to 2 wheeler and 4 wheelers, even the commercial segment vehicles will be forced to cough up extra TPL premium. The hike is going to be steeper than last year in the range of 20-25% as compared to the hike of 9-20% last year i.e 2014. For commercial vehicles it is expected to be even more steeper in the range of 55%. This is being done to offset the losses incurred by Insurance companies for the TPL claims.

http://www.business-standard.com/art...0700355_1.html

Quote:
From April 1, 2015, two-wheelers and four wheelers apart from other commercial vehicles may see at least a 20-25% rise in their motor third party (TP) premiums.
Both public general insurers and private general insurers have sought a hike in TP premiums for 2015-16, to make up for the losses in the segment.
The interesting part is this:

Quote:
The general insurance segment is also considering linking motor pricing to individual behaviour, as well as the location of the vehicle. For instance, if a vehicle is chauffeur-driven and runs within a small city, or if it is driven by a woman, the premiums might be lower. For vehicles driven in hilly areas or difficult terrain, the premium might be higher.
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Old 13th February 2015, 10:20   #14
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Default re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

I hope this results in a corresponding drop in Comprehensive rates since there is no cross subsidy. Only a fraction of vehicles are under comprehensive, so they may gain more. Furthermore, the other configurations Act + Theft, Act + Fire and Act + Fire & Theft. Should be brought back. These attract 25-30% for one and 40% for both. In older cars these were attractive since after depreciation the Comp part did not work out as much. Since then the depreciation has been improved. We also did away with NCB dropping two notches instead to zilch. All these retrograde steps were taken to improve the loss data, ie pay the unfortunate by penalising the careful.

One other thing as in the UK claim for Windscreen should not impact the NCB. Another possibility Protected No claims, ie pay 5% and up to two or three claims in five years do not impact your NCB.
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Old 13th February 2015, 11:04   #15
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Red face re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2015!

Quote:
Originally Posted by sgiitk View Post
One other thing as in the UK claim for Windscreen should not impact the NCB. Another possibility Protected No claims, ie pay 5% and up to two or three claims in five years do not impact your NCB.
These feature are also available in India. Presently Royal Sundaram provides Windshield protection add on cover which does not affect NCB and also NCB protector cover which covers upto 2 claims in policy year without impacting the NCB. But of course there come at an additional cost.

The issue here is that this has become an annual ritual for the Insurance co to cry hoarse at the start of the new financial year ior before the budget is placed. They make a huge hue and cry of the losses, forcing the government and IRDA to sympathise towards them and give them a free hand for increasing the TPL rates. Whats steps are the Insurance co taking to prevent the ballooning of the TPL claims?
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