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Old 24th February 2014, 16:56   #1
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Default Insurance premium higher for 'existing' customer than 'new'

Hi All

Starting this thread to understand if I am the only one who has experienced this or if it is a regular practice. I searched for any related thread but couldnt find any similar thread. I have an existing car insurance from Royal Sundaram which will expire in a week. I was looking to renew the insurance so went to the Royal Sundaram website to check the quotes. On the website you can continue as "existing customer" or a "new customer". I figured that the quotes that I was getting were different for these two categories (even though the input parameters were the same). What was disappointing was that the premium was higher for the "existing customer". Later on I called the call center of Royal Sundaram to check the quotes again and much to my dismay the sales executive declined to give me a quote when I refused to tell him whether I am a new customer or an existing customer.

On a seperate note, I also had a call with Bajaj allianz executive today where he tried to sell me the car insurance policy. For the same set of input parameters, the premium that he was quoting was about Rs. 300-400 higher than what I could find from Bajaj Allianz website. I questioned him about this and he said that under Bajaj Allianz's "Spot Assistance" program, some 11-12 services were offered of which only 4-5 services were a part of the online insurance product. He also told me that the customer service experience of offline purchase and online purchase was different. On hearing this I asked him to send me an email comparing the services (specifically on spot assistance) of offline and online product. He flatly refused to do so. He said that he would send me the proposal for offliine product but would not provide me with any written material on the online product.

I hope there was a way IRDA could examine such malpractices.
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Old 24th February 2014, 17:02   #2
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Default re: Insurance premium higher for 'existing' customer than 'new'

Yes. It is true that when you renew with Bajaj, you pay more than what you would if you are coming from a competitor insurance company.
As a result, I have had to switch between Tata AIG and Bajaj every alternate year.

I guess Bajaj has this as a loyalty bonus for its customers (speaking sarcastically).
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Old 24th February 2014, 17:16   #3
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Default re: Insurance premium higher for 'existing' customer than 'new'

I had a similar experience too. Last year, when I renewed my insurance (Insurer was ICICI Lombard - this was done by the dealer when I bought the car), the cheapest quote was on Bajaj Allianz which was offered by Berkshire Insurance. I opted for this. As Berkshire has now shut operations in India, I tried renewing with Bajaj directly and got a very high premium. Eventually settled for TATA AIG with a zero dep cover. None of the insurance companies were willing to share a written document with all the conditions and features. I had spoken to half a dozen of them as Policy Bazaar had happily shared my number with all of them. Was atleast able to match the features / policy name shared by the TATA guy with their website and went for it.

If you do take the policy, you can request TATA AIG to send you a CD with all the conversations with their executives, from the time they contacted you. In case of any discrepancies, you can perhaps use this to defend your stance. However I am not sure if this will work in a court of law, if the issue gets dirty and gets dragged there.
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Old 24th February 2014, 17:37   #4
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Default re: Insurance premium higher for 'existing' customer than 'new'

One more addition to the group.
Was one of the forced customers of Bajaj Allianz when I bought the car.When policy was due the difference in quote was about 6000 bucks for 0 dep between HDFC and Bajaj.
However when I want to renew it this year,Turns out Bajaj is the cheapest of the lot.!

Surprising,However true!
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Old 24th February 2014, 17:41   #5
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Default re: Insurance premium higher for 'existing' customer than 'new'

Yes, this happened to me as well. I had Royal Sundaram's insurance for the first year. After 10% vehicle value depreciation and having no previous claims, I was expecting a lower quote. When I inquired the cost to renew the insurance, they gave me a quote of INR 35000 something. This was less than 800 from their existing insurance quote.

I shopped around for a while and almost everyone was giving me a quote far lower than Royal Sundaram. I finally took Videocon's zero depreciation insurance for over 8000 lower than the best deal from Royal Sundaram.

I guess in India, it doesn't pay to be a loyal customer , a customer who wants to buy more or to be a customer in general .

Case 1: In supermarkets ,If the cost of 1kg of Item1 is 1x , the cost of 10kg of Item1 tends to be 10x ( or really close to it). There are instances where it is beneficial to buy 1kg item 5 times than a 5kg item .

Case 2 : if you are booking tickets online, you will find that the direct flight is way cheaper than connecting flights that will take over 3x the time when compared to direct flight. I mean, the airline should be glad that someone is opting to take a longer route and not opt for another airline. But it is the exact opposite in India.

I can go on with other cases, but guess this is the difference between India and developed nations like USA.

Last edited by dreadknight5 : 24th February 2014 at 17:42.
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Old 24th February 2014, 17:42   #6
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Default re: Insurance premium higher for 'existing' customer than 'new'

But what do the parent company earn by losing an exisitng customer to another competitor? Majority of people do take different quotes before renewing.
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Old 24th February 2014, 19:21   #7
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Default re: Insurance premium higher for 'existing' customer than 'new'

i had faced same issue ,hence keep changing companies every year,not only the premium is less you could also bargain for better IDV and other add-on features.My understanding from inside info is new customer acquisition is subsidized
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Old 24th February 2014, 19:58   #8
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Default re: Insurance premium higher for 'existing' customer than 'new'

You have to get quotes from others & then threaten your present provider that you will move away. They usually match. Most of us are too lazy to negotiate a renewal.
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Old 24th February 2014, 20:06   #9
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Default re: Insurance premium higher for 'existing' customer than 'new'

My Car insurance is due next month and the quote sent by maruti insurance through national was insulting to say the least. A 1 year old cars value was down by about a 1.2L and premium was around 3k lesser than what I paid for a new car. Bajaj was the same and finally I settled with Bharati Axa, they gave me a good IDV and also their premium was lower for the same benefits that both National and Bajaj were offering.

A suggestion based on experience is that, do check policy bazar before buying, but always buy from the company website directly if you are purchasing online. I have found the direct way works cheaper than through PB.
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Old 24th February 2014, 21:41   #10
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Default re: Insurance premium higher for 'existing' customer than 'new'

In such a case, I would take 2 quotes - one as an existing customer & one as a new customer and then also get quotes from couple of other vendors. If the company is ready to renew and retain me as a repeat customer, I will give them my business. Else I'll move away. End of the day, my previous company is going to lose out if they are NOT good to me.

The only thing you need to watch out is for the IDV. These morons will match the lowest quote by reducing the IDV drastically.
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Old 25th February 2014, 06:37   #11
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Default re: Insurance premium higher for 'existing' customer than 'new'


Happened with me as well last time when i was renewing my car insurance. I had my policy with ICICI Lombard. But i did not bother and continued with them, i think i should be more alert about this when i am renewing my insurance this year.

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Old 25th February 2014, 07:52   #12
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Default re: Insurance premium higher for 'existing' customer than 'new'

Guess I'm the only one with a positive feedback. However, I get all the policies done through my uncle in oriental insurance. Though he does not issue policies, there are his subordinates who do the same. Compared to online quotes, I get tremendous discounts.

Their own website gave a higher quote for my dio this year, and yes it was higher than what I paid the first year. They quoted 1200. Since it was just an experiment, I later got it done by him for Rs. 907 which is comprehensive along with full legal coverage in case of accidents and a PA cover.

Has anyone tried approaching direct agents? The dealers as well as websites seem to charge a lot. The agents have certain discounts which they can apply to the policy.
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Old 25th February 2014, 08:26   #13
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Red face re: Insurance premium higher for 'existing' customer than 'new'

I thought it is always the other way round. Existing customers will be given more benefits in the form of discounts rather than the new customer. Insurance co arent supposed to differentiate between old and new customers when it comes to the Insurance premium computations. Of course they are at liberty to give that extra discount to the existing cusotmer in order to retain them.

Going OT - Is this something every similar to the home loans when the new applicant are offered discounted interest rates as compared to the existing who pay more than that offered to the new customers. But as RBI bought the malpractices to book by forcing the banks to levy the same interest rates across all customers.

On similar lines if the malpractices by Auto Insurance co are brought to the notice of IRDA, a similar rule might be enforced. But who will bell the cat?
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Old 25th February 2014, 09:32   #14
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Default re: Insurance premium higher for 'existing' customer than 'new'

I am trying to renew my insurance with TATA AIG - and facing the same issue.

1. They gave a qoute for a fixed amount. When i logged in online I dont have any options but to just renew it for the amount and IDV mentioned.

2. I tried checking their website as a new customer. They amount I need to pay is LESSER for the same IDV value.

3. New customer has a choice of increasing or decreasing the IDV value above and below the qoute mentioned by TATA AIG according to his requirements.

4. Called up customer care to check if I have option to increase the IDV value - they told they will raise a request with 'Remittance' department and I would be receiving a call back. Within 48 hours! Had I been a new customer, they would have bombarded me with calls by now.
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Old 25th February 2014, 10:04   #15
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Default re: Insurance premium higher for 'existing' customer than 'new'

I too had faced the same issue in the past. Discounts were higher for newer customers but far less for the existing ones.

Eventually I was contacted by corporate agent through whom I got a very lucrative deal. Premium I paid was lesser than the what websites of insurance companies quoted. Have been renewing my policies through the same agent multiple times and never looked up the website again.
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