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Old 29th March 2016, 13:57   #1
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Red face April 1, 2016: Third-party motor insurance premiums increased

The increase in the Third party liability premiums have been quite sharp this time. I have attached the IRDA order pdf document for reference. Also below is the snapshot of the key vehicle categories. The first pic is for 2015-16 rates and the second pic is for 2016-17 rates
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April 1, 2016: Third-party motor insurance premiums increased-tpl-rates-201516.png  

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File Type: pdf Motor-third-party-premium-rates-2016-17.pdf (3.79 MB, 1405 views)

Last edited by ghodlur : 29th March 2016 at 13:59.
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Old 29th March 2016, 16:10   #2
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Default Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

What is the point of increasing the TPL premium so steeply each year?
There are hardly any claims made against the TPL, at least in the passenger vehicle segment. Most of us do not go for this due to the lethargic procedures involved.

In spite of not much claims arising out of TPL, the rise in premiums is surprising.
There is a large % of vehicles running uninsured on Indian roads and with this move, the number will only increase.

PS: Now the TPL premium for my Palio gtx will be 1/8 the resale value of the car. What an irony.

Last edited by vinit.merchant : 29th March 2016 at 16:11.
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Old 29th March 2016, 19:35   #3
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Default Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Pretty steep increases!

Small car i.e. less than 1000 cc: From Rs. 1,468 to Rs. 2,055 (40%)
Mid-segment i.e. between 1000 cc & 1500 cc: 40%
Premium & SUV: i.e. more than 1500 cc: From Rs. 4,931 to Rs. 6,164 (25%)
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Old 29th March 2016, 20:31   #4
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Default Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Quote:
Originally Posted by vinit.merchant View Post
What is the point of increasing the TPL premium so steeply each year?
My take - Many older vehicles are running only on TP Premium. Increasing this will increase the revenue.
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Old 29th March 2016, 20:33   #5
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Default Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Sneaked in and renewed the full cover car insurance which was due on 13/04/2016 today and avoided the hike!
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Old 30th March 2016, 08:52   #6
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Red face Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Quote:
Originally Posted by johannskaria View Post
Sneaked in and renewed the full cover car insurance which was due on 13/04/2016 today and avoided the hike!
That's lucky of you.

I tried to renew my 2 wheeler insurance which expires on 7th April 2016 and the premium quote seen on the website is already with the hiked TPL premiums. Will be having a chat with the Insurance co rep before renewing if it was possible to renew with old TPL rates.
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Old 30th March 2016, 12:55   #7
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Smile Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Quote:
Originally Posted by ghodlur View Post
Will be having a chat with the Insurance co rep before renewing if it was possible to renew with old TPL rates.
An update:

Had a chat with the Insurance co i.e Oriental Insurance and the renewal quote was revised with old TPL rates. Paid the premium for the 2 wheeler insurance online.

To all those who wish to renew the Insurance (2 wheeler/4 wheeler) before 31st march i.e tomorrow, please have a word with the Insurance co before you pay the premium incase the renewal quote is with the new TPL rates. Insurance co cannot charge new TPL rates till 31st March 2016.
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Old 30th March 2016, 15:58   #8
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Default Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Had a chat with Bajaj Allianz sales person and confirmed with him that any policies bought before 31st would get the benefit of old TPL rates. However, he disagreed to offer the policy in my name with just the Form 28/29/30. He said he can only issue the policy in the name of the owner in the RC. I think that's incorrect though.
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Old 30th March 2016, 18:14   #9
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Originally Posted by mi2n View Post

Maybe they presume that first time buyers and new drivers opt for smaller vehicles, less than 1000cc. New owners/drivers are more likely to cause damage to properties. Maybe they have statistics that this segment too, like the commercial segment account for more third party claims.
The only reason to increase the third party insurance is to offset the loss due to exploiting the Third party insurance by Commercial vehicle segment /Transporters.

The insurance companies lobby for increases to preserve profitability.

The Transportation industry is well organised and will threaten a strike if they have to pay more Insurance premiums. They lobby for lower premiums. And they use the third party system to the max, as they have the resources and pull to get third party claims from insurance companies.


The only way to pay for this is to hike passenger car insurance premiums. Because car owners are not organised for protests and do not lobby for their interests.

So this increase will continue. As the number of commercial vehicles on the roads increases and their liabilities increase every year.

This increase will continue until something changes. Either the passenger car owners protest or the commercial vehicle segment starts paying more. Or the liabilities of commercial vehicles decreases (which means better trained drivers, no overloading, well maintained trucks, better road infrastructure etc. etc.)


Guess which scenario is most likely.
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Old 30th March 2016, 19:27   #10
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Default Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

My Car insurance expires on 24th April 2016 and I already got a reminder to renew. I checked the website today and it still shows the pre-increase amount for third party premium. If I renew today, do I still need to pay the difference? or the premium at the time of renewal (before march 31st) is applicable?
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Old 30th March 2016, 19:33   #11
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Smile Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Quote:
Originally Posted by praveen_v View Post
My Car insurance expires on 24th April 2016 and I already got a reminder to renew. I checked the website today and it still shows the pre-increase amount for third party premium. If I renew today, do I still need to pay the difference? or the premium at the time of renewal (before march 31st) is applicable?
No you wont need to pay the difference. The premium as seen today without the announced TPL rate hike will be still applicable if you renew it by 31st March 2016. From 1st April, new TPL rates will be applicable.
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Old 30th March 2016, 19:51   #12
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Default Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Are you sure? Exactly how much time in future can you leap to avoid the increase in prices? I have my policy expiring on 5th May 2016. Also, wont the insurance company later claim back the difference? Once my friend renewed his policy online with 40% NCB by mistake when it should have been 30% (he though 20% in 1st renew so 40% in 2nd renew) but later Bharati-Axa sent him a letter claiming the difference or his policy wont be valid any more. In the same way cant the company claim the increased rate failing which no claims will be allowed?

Last edited by ampere : 31st March 2016 at 07:12. Reason: Formatting
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Old 30th March 2016, 21:49   #13
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Default Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Insurance companies will charge the difference (or increased premium difference) once it comes into effect. I renewed my car insurance which was expiring 31 march and although I have paid pre-increase quoted figure I am already told that once 3rd party coverage charge increases, I would be asked to pay the increase.
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Old 31st March 2016, 01:52   #14
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Originally Posted by cs_rajesh View Post
Insurance companies will charge the difference (or increased premium difference) once it comes into effect. I renewed my car insurance which was expiring 31 march and although I have paid pre-increase quoted figure I am already told that once 3rd party coverage charge increases, I would be asked to pay the increase.
Just to clarify things - your policy is expiring on 31st midnight i.e. new policy starts on 1st April 2016. Right? Because if your new policy starts on 31st and you have been told that you'd need to pay the difference later on, that would mean every existing policy holder will need to pay the difference on pro rata basis! surely that can't be the case.

Quote:
Originally Posted by ghodlur View Post
No you wont need to pay the difference. The premium as seen today without the announced TPL rate hike will be still applicable if you renew it by 31st March 2016. From 1st April, new TPL rates will be applicable.
As cs_rajesh have been informed by his insurance company that policies beginning on 1st April 2016 or later, which have been renewed in advance, the insurance company will claim the difference in any case. So isn't it better to renew with the new rate, and save yourself the hassle to pay up the difference later or worse your claim being unnecessarily held up sue to the discrepancy in the premium paid?

Last edited by ampere : 31st March 2016 at 07:12. Reason: Back to back posts merged
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Old 31st March 2016, 08:00   #15
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Wink Re: Brace for increase in 3rd-Party Insurance premiums. EDIT: Again in April 2016!

Quote:
Originally Posted by Sam.91 View Post
As cs_rajesh have been informed by his insurance company that policies beginning on 1st April 2016 or later, which have been renewed in advance, the insurance company will claim the difference in any case. So isn't it better to renew with the new rate, and save yourself the hassle to pay up the difference later or worse your claim being unnecessarily held up sue to the discrepancy in the premium paid?
I have been renewing the insurance for my 2 wheeler couple of weeks before expiry for the past 3 years just to avoid the hiked TPL rates. Not once has my Insurance co charged me the difference in the TPL premium rates later during the policy period. Once the premium is paid and the policy issued, Insurance co do not generally care to check if the premium paid was with old TPL rates or new.

However for my car, since the policy expiry happens in June of every year, I end up paying the hiked TPL premiums. No escape there.
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