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Old 2nd March 2008, 21:17   #1
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Default Insurance Renewal -- query

Hi Guys,

My car insurance will be coming for renewal later this month and I'm presently with Royal Sundaram (RS). I would want to continue with them as the dealer (in Coimbatore) has a tie up with RS. The car is a Fiesta and is almost 2 years old and its present value is ~5.4L. The dealer has contacted me and sent me quote of the premium amount for renewal. The quote is about 12.5k (includes own damage and liability). He has included a discount of ~4k & ~2.5 k for NCB & commercial discount respectively.

Just to verify this quote i went to the ICICI online premium calculator and supplied all the required details and the quote came to ~8.5k. The Insurance value (IDV) that RS has taken is 5.2 Lacks & ICICI has taken 3.8 Lacks. According to the RS' website the depreciation slab for arriving at IDV is 30% and this matches with ICICI's IDV and not their's.

My questions are :

Is RS trying to jack up the IDV to get a higher premium?
Is there a benefit with a higher IDV ? - as i understand the claims are paid taking into consideration the age of the vehicle ( they apply a certain depreciation % to the actual claim) . Will a higher IDV influence the calculation?

Thanks much in advance for any advice.
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Old 3rd March 2008, 10:58   #2
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This happened to me as well when i renwed my 1st yr ....

IDV value dose help when you put you car to sale..... that may help you other wise I am not sure if that effects your insurance in anyways...

Other experts can through there views... I too have my insure for renewal..

Nemo, also note you can get the same bargain form RS folks after u show thw ICICI folks deal... that worked when Relince gave me a better deal and I used it for my current Bajaj Allianz guys...
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Old 3rd March 2008, 11:11   #3
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My insurance is also due for renewal. Is it safe to take it via the dealer? I'm not sure, but I had 2 claims during this year, and the dealer took good care of both claims. I only had to fill up a claim form.
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Old 3rd March 2008, 12:24   #4
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Hi Vnabhi,

You may note Mody ford is offering if we renew our insurence through them they offer a free car wash,+ wheel balancing+ alignment + free towing if car failure ( rs 2500 worth) + 10% off on accessories + some other i remember.

What I did is 1st took the best quote for renewal and then asked my insurence guy taht i want to pay it through my car dealer which ia no probs....
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Old 3rd March 2008, 13:51   #5
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Thanks VC12. I was aware of the freebies, but not regarding the towing service and the accessories part.
Mody Ford has a tie up only with ICICI Lombard and Bajaj Allianz.
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Old 3rd March 2008, 13:56   #6
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Quote:
Is there a benefit with a higher IDV ? - as i understand the claims are paid taking into consideration the age of the vehicle ( they apply a certain depreciation % to the actual claim) . Will a higher IDV influence the calculation?
To the best of my knowledge, no. Claims are settled according to their own depreciation chart, and not by how much you have set the value at.
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Old 3rd March 2008, 14:08   #7
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I think, the IDV comes into effect if you have total loss of your vehicle. Otherwise, if it is a dent repairing or bumper replacement, it doesnt take into account the IDV of the vehicle.

We can bargain with the insurenace company to bring down the IDV, if required. But for this we should have ample time at our disposal before the insurance is due for renewal.
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Old 3rd March 2008, 14:20   #8
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Yes, Thats right Vanbhi,

I have my insurance with Bajaj Allianz, they alos have with Reliance...
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Old 3rd March 2008, 21:22   #9
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thanks for clarifying, guys. I'll ask RS reduce the IDV. I have around 3 weeks before the insurance expires so will do a through research this time unlike last year.
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Old 3rd March 2008, 22:24   #10
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In case of a serious accident where the car is scrapped, the IDV plays an important role.
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Old 3rd March 2008, 22:38   #11
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No matter what, even if its a total loss insurance will go by Depreciated value based on years. There is no point going with higher value if your car has grown older.

While on the topic, my car policy is getting renewed, how do you rate Tata's insurance service?

They have offered me a good renewal option, right now am with Maruti-National Insurance. Anyways ill check with them also for the renewal amount
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Old 3rd March 2008, 22:39   #12
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can the policy holder fix the IDV? i thought the insurer fixes the IDV based on their internal 'charts' and we just have to pay the premium.

lowering the IDV has its negatives. u get paid less when the vehicle is written off.
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Old 3rd March 2008, 22:55   #13
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Quote:
Originally Posted by Jaggu View Post
No matter what, even if its a total loss insurance will go by Depreciated value based on years. There is no point going with higher value if your car has grown older.
Then whats the point in having an IDV ?
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Old 3rd March 2008, 23:12   #14
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I dint get your question, what i was trying to say is: 1st year depreciation is usually 20%, say for a 1 lakh value registered 20% is reduced to arrive at depreciated value of 80 thousand. Insurance company has max liability of paying this 80 k and there is no point in having a value more than this while evaluating.

But if the owner wishes to undervalue, company might or might not allow say 70 k, but then max liability is limited to 70k. Which is really not worth it especially if its a 1 to 3 year old car. On the other hand asking them to value your car at 90k and they will not agree.

This is what i know.

Going back to original questions
Is RS trying to jack up the IDV to get a higher premium?

Double check and confirm the % they assign wrt years

Is there a benefit with a higher IDV ? - as i understand the claims are paid taking into consideration the age of the vehicle ( they apply a certain depreciation % to the actual claim) . Will a higher IDV influence the calculation?

If its total loss or similar, they will use depreciated value OR then market price, whichever is lower for calulations. Partial claims will not have any relation and will be paid according to regular claim rules applicable, ie % for plastic parts, metal parts etc

Last edited by Jaggu : 3rd March 2008 at 23:22.
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Old 4th March 2008, 14:02   #15
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So in other words , one should go for true IDV that is true depreciated value of the vehicle . If one goes for a higher IDV he will only be paying a higher premium but will be reimbursed only the true depreciated value irrespective of the higher IDV. This seems like a no win situation to me.However if you have a lower IDV then you are at a loss when the car is scrapped totally but at a profit when paying the annual premium .

Now the question remains is what is True IDV . Dont all the insurance companies have the same depreciation rates as the basis of their calculation ?
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