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Old 3rd July 2006, 05:44   #31
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Angry Will the Insurance be costlier from 2007 ?

Come January 2007, the car insurance industry will witness significant changes. The motor insurance will move out of the Tariff Advisory Committees (TAC) mandate. In insurance jargon, the sector will be detariffed.

That will allow insurance firms to charge premiums on the back of variables they establish based on their claims experience.

Apart from how powerful the car is, what the final price is, in which year it was manufactured, and in which part of the country it will run, that already exist, this will include the driver’s past claims experience, residence, make and model of the car, how frequently does the model get stolen, cost of spare parts, service charges, how much the car will be used, and where specifically the car gets used.

Car insurance in India has always been cheaper than global levels. Prices were regulated and there were only a few limited parameters that were used to set the premium. Like in the western countries, you may pay up much more if you are accident prone, or if your car is unsafe, or if it is bought in a region where car theft is more common, or if the model you have bought is prone to theft.

I've also heard that as per the new motor tariff policy all cars will be rated on the basis of cubic capacity. This means advanced technology and safety features of your vehicle will not be taken into consideration. Your vehicle’s insured value will be determined on the basis of the insured’s declared value (IDV), which will specify the percentage of depreciation. Which means indemnity for total loss/constructive total loss will now be based on IDV instead of the earlier IEV or market value.

Will this de-regulation really going to work here in India ?

Which vehicles will be the most affected ?


Note from mod : Threads merged

Last edited by tsk1979 : 14th July 2006 at 09:52.
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Old 7th July 2006, 09:43   #32
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I have no idea if these norms are going to be enforced from Jan. Haven't been in touch with things happening in India off late. But I am sure other members here will know better. Anyway, it's only a matter of time before the Indian insurance moves in sync with the international scene which means insurance is going to be a rip off in India too! Deals will be made and/or lost because of insurance on cars. Sad but true.

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This means advanced technology and safety features of your vehicle will not be taken into consideration.
This part does'nt make sense. Why should a car with air bags, ABS, ESP be judged on the same level as a car with none of these safety features?
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Old 12th July 2006, 05:23   #33
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The auto insurance cos are going through bad patches these days since auto insurance sector is not quite profitable when compared to life insurance and so there is a greater possibility of this sector will be detariffed.

Checkout...

Seems to be like nobody at Team-BHP is paying insurance these days since no-one is interested in this thread.
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Old 12th July 2006, 18:04   #34
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I hope that they will also update the quality of service they provide and for once hire better surveyor who are of sound mind..!
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Old 6th September 2006, 16:21   #35
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Default Auto Insurance Premium going up

TOI Bangalore carried a front page article about Auto insurance going up significantly from 2007.
Some of the points where the premium could be higher are as follows

1. Driver consumes alcohol
2. Wears glasses
3. Uses cars regularly for out-station drives
4. Where the car is parked daily (more premium if there is no safe parking)
5. Lives in an area classified as high-theft zone
6. Car's top-speed. Higher the top speed higher the premium!
7. Previous claim history (of all vehicles owned) is also going to be a criteria for the premium.

There are many more points, I don't remember them now... but the insurance scene is going to change and everyone is going to think 100 times before making a claim or buying a particular type of car!
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Old 6th September 2006, 16:26   #36
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i read the article this morning in the Times of India and lots of the changes are ridiculous and one would really think twice about buying a car of their choice because of the insurance conditions.its going to hike claims n everything and i have no idea if the whole change will do any damage though!!

maybe some of the seniors here can help us understand it better if possible!!
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Old 6th September 2006, 16:47   #37
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I guess It reads nice on paper but lot of unsubstantiable conditions, say for ex the drunk clause, Even if some one manages to prove that I am drunkard I can always hire a driver to do my driving, How can some one prove that I drive or do not drive on long trips over weekends. etc etc.
Few things could come out of it is the Risk categories will be redefined like faster the vehicle more the premium but I guess that's already covered somewhere in the engine capacity clause .Let wait and see..
Pattern of claims from previous vehicles owned etc. All others even if implemented will miserably fail so no worries.

Last edited by F50 : 6th September 2006 at 17:05.
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Old 6th September 2006, 17:21   #38
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What if I am buying the car in the name of the company?How will they decide on the premiums based on conditions such as smoking/drinking?
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Old 6th September 2006, 17:56   #39
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Well...

Two months ago, I attended this Accenture seminar on data warehousing etc. Where they proudly discussed their acheivement on introducing this methodology of what premium for what customer. Yeah, the red color was discussed proudly.

In short, yes it's coming...

When..., hmm... anyone in accenture working on that project...

That's all I have to say...

I anyways i'm finding my dream of owning my own car difficult, with this I think I should stop thinking about it.

Ciao
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Old 6th September 2006, 23:18   #40
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Some more criteria
1. Over 40 pays higher insurance
2. Smoker pays higher insurance
3. Lifestyle enquiries also come into play.
Looks like this is going to be a party
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Old 7th September 2006, 11:21   #41
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Whether you are married or single, gay or straight...? Car is red or blue? White or black?
But seriously, yes, most insurance companies will have several point checklist with weightages, one of which surely will be accident history. Owners without history - premium will be very high in first year. But look at it positively - people will graduate towards lower overall cost of accident repairs / safer cars and also less rash driving. Dealers will make their money one way or another. If skoda is not giving them adequate margin on car, they are making on spares/service. After all dealer today has to maintain good quality premises, staff, equipment, inventory, etc. and has to pay taxes.

I am not too worried about premiums, competition will take care. Problem is more in third party - liability claims. We are paying a very small amount for this premium, which will jump considerably. In fact except for first year comprehensive premiums, 50% of vehicle owners only take liability cover at very low rates, thereby queering the situation for the insurance companies. Now they will be able to charge say 6k a year for this instead of 600rs and maybe drop own damage somewhat.

In view of overall economic growth and increase in earnings all around, third party liability claims are only going to increase in quantum and so are the premiums.
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Old 7th September 2006, 11:27   #42
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Competition? What competition? The kind of privatization we have in India ensures price fixing and cartelization.
Look at the mobile phone market. Isnt it surprising that if you look at a lucrative scheme from an operator, there is a good chance that an exactly similar scheme with exact same tarrifs is available with the rivals too?
Same thing will happen here. Private players will share data so that people who switch from one operator to other carry their histories with them.
And yes, cars with higher spare parts costs will have higher premium, unlike the present regime where the premiums are based on the ex-showroom price of the car. This is the practice in west too, but there is literally dog eat dog cometition between the companies,
Moreover in the west the laws are clear too. There if you kill a pedestrian crossing a freeway, you wont need to spend even a day in the lockup, in India unless you bribe your way out, you can be sure of a conviction since you drive a car.
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Old 7th September 2006, 11:32   #43
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Quote:
Competition? What competition? The kind of privatization we have in India ensures price fixing and cartelization.
Exactly my fear. While we can adopt the principles of developed markets, this aspect will remain and us, the consumer, will pay the price.
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Old 7th September 2006, 13:50   #44
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I would prefer to disagree. While there may be some price fixation / cartelisation, it is much better than control / command economy. Once you have more players in the market, things will tend to be better for consumer. Yes, one may find similar telecom tariff schemes, but just see the effect that 3 - 4 players have had over past few years. 15p/min local, 2.40 STD, 1.20 STD from MTNL to Delhi, 4.50 ISD! Civic launch has dropped prices sharply on corolla/optra. Swift launch effectively dropped getz prices. Kingfisher has got Jet all in a tangle, forget about Deccan, Go and Spicejet.

If not in prices, then maybe customer may benefit by add-ons like standby car, free towing, additional medical/injury cover, etc.

Sharing data and video surveillance we all have to live with. In the west too, credit history is shared and social security number tracks you everywhere. Actually the regulatory authority must make it mandatory to share data amongst all players, so that careless/rash drivers or owners are penalised with heavy premiums, while careful owners/drivers enjoy low premiums. That will stop many owners from employing young fellows who have got licences by dubious means.

Hopefully we can also move to fault based claims. In Singapore (and many western countries), if you crash into a car in front of you or you broke the signal, you are liable to pay for both cars. So if a pedestrian was jaywalking, you do not have any liability. Is this too much wishful thinking? But maybe not, since the cameras at the junctions will now be able to help you.

Last edited by sandeep108 : 7th September 2006 at 13:51.
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Old 7th September 2006, 14:01   #45
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Huh,
This control and command economy ensures that I paid just 7000rs premium on my car, even after claims.
If this control economy wasnt there the insurance rates would go up. I dont want privitization here. Only in fields where it benefits me I want privatization.
A very selfish approach, but then it saves me money.

As for liability, the law says that bigger vehicle is at fault, and insurance privatization will not change this. This law will stay because bigger vehicles have lesser number of votes than smaller vehicles.
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