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-   -   Cholamandalam-MS refuses to offer insurance to 5+ year old cars from North India (https://www.team-bhp.com/forum/indian-car-loans-insurance/126505-cholamandalam-ms-refuses-offer-insurance-5-year-old-cars-north-india.html)

I own a Skoda Laura L&K (2006). It has been insured from Day 1 by Cholamandalam-MS. When it was up for renewal this month I was in for a rude shock, Chola DENIED renewal of the insurance on the following grounds:-
(1) The car is based in North India (New Delhi)
(2) The car is over 5yrs old

According to the manager, Ranjini who refused to give me her full name, A car that is older than 5yrs have a higher probability for claims and that North India is leading the way in fraudulent claims, hence they believe that the risk is high in case of my car and hence they do not want to renew the insurance.

Apart from being overpriced, this company has taken my insurance premium for the past 5 years (I have a No Claim in the 5yr period) and are now walking away washing their hands off, because they feel that the risk is high now?

Then why did they take the premium for the last 5 years?

I find this amazingly ridiculous and have written multiple emails to the company, ALL of which have gone unheeded.

I would strongly recommend that everyone exercise caution when dealing with this organization, as not only are they high handed, I would believe that they would have issues disbursing claims as well considering that such behaviour is prevalent in an organization.

take your NCB and go elsewhere. The market is loaded with players who will entertain you.
I hope that the insurance hasnt expired in the time it took for the bickering to happen.
yeah?

Mayankk

The point is not about going to any other insurance provider, that option has been open to me for the past 5 years.

What I am aghast is the apathetic attitude of the company once they've taken the chunk of the premium, over the past 5yrs my premium paid would be in the range of about 2Lakh+. If I have a claim now, I will not have a negotiation lever with the insurer as I am as good as any other customer down the road.

The company took my loyalty for granted and screwed me over. Its that sense of rage ... of violation that I'm not able to digest.

:) Its their prerogative at the end of the day.
And trust me, it matters for not a whittle that you're a long standing customer or short sitting one.(:)).
When it comes to a claim, they are all the same for the insurer, in that they will try and weasel out of it.
There will not be any special treatment meted out to you.
And in fact, none is required. I have used 3 insurers in the past 3 years, and have claims on 2. All I had to do was leave the car at the dealership, and all survey and things happened there only. Ford themselves arranged for the claim. So tell me, what do i need loyalty bonus from the insurer for?

Thats very unprofessional reason to give. Why do they insure the cars based in North India at the first place? :Shockked:

I think you may at least lodge a complaint with IRDA and see if they can handle such regionalism in the insurance company.

Why can't we have a rule against rejecting renewal when we have compulssion to get our cars insured?

I guess they will not be the only service provider to behave like that.

I'd suggest you look forward now. Do check out all other providers, including the public sector ones. If you are working for a large company, check if there is a preferred service provider for motor insurances (will be there if the company provides company leased cars)

I agree, take your NCB and go to other insurance companies, kick away Chola. The market is very competitive and am sure other insurance companies would be readily giving you a policy

With many 5+ year old cars, the insurance / book value sometimes exceeds the market value. Though I don't think that's the case with a diesel Laura, it is for my 5+ year old petrol Civic (as an example). Also, considering that we are in September 2012, your '06 Laura is perhaps closer to 6 years than 5. The company is right in stating that theft / total loss claims for older cars are higher than for <5 year old cars.

Had they categorically told you that they'll keep insuring your car for as long as you own it? Smaller insurance companies don't have the risk-taking capacity and will have certain, restricting guidelines. They are definitely wrong in refusing to cover a long-standing customer but, at the end of the day, it's their business decision.

Just go & shop elsewhere. There are plenty of insurance companies who want your business.

Thats a very silly reason to refuse an insurance cover. If referred to IRDA, they shouldnt wash off their hands saying it is a business decision. Insurance companies are free to quote a higher premium if they evaluate a higher risk in covering the vehicle. But why refuse on such flimsy grounds ? Would this be a substantial reason to move the consumer courts? As other members say, the competition is tripping over each other to grab business. Chola's loss would surely be someone else's gain. Tu nahi to koi aur sahi !

Exactly. Unethical - maybe; but i dont see why their behaviour is illegal. Just like you have a option to choose Chola as your insurance provider, they also have a option to choose you as their customer. Besides as already mentioned, there is no concept of loyalty benefit in insurance. I would suggest just go ahead and renew insurance from any of the other companies online !

I already have a couple of other insurers willing to take this up. But I'm just surprised at the way Cholamandalam has handled this.

Honestly GTO, I don't think Volkswagen categorically told anyone that a dealer wouldn't take a Jetta for a joyride and crash it. So what's your logic here? There's something known as acting in "good-faith", which I believe Cholamandalam didn't do.

To your point ethan, I'd agree 100%. However, arbitrarily saying you're not going to renew based on a regional and age bias in my opinion does constitute discrimination.

My lesson - next time around be the typical bad customer that harasses the companies till their wits end and screws every pound of flesh out of them. Awesome way to do business I say.

Insurance premiums worldwide are based on facts such as - Gender, Region, Driving History, Age, Profession etc. So no way is this discrimination. What would be discrimination would be differentiating on the basis of religion, looks etc

Did you escalate the matter to Chief Grievance Officer @ chola. if you still dont get a satisfied explanation regarding the same then you can escalate the matter to Insurance Ombudsman at IRDA.

I understand that it may have offended you but it is a decision based on past trends and records.

Based on the data, companies find trends that cars like Lancer or bikes like R15 are more prone to claims compared to a WagonR or Splendor. So as a business decision they issue a notification to the sales team to avoid insuring these 'loss making' products.

Its nothing personal, one can be a very sedate driver of his Lancer were as a WagonR guy can be a maniac. The reasons for refusing are not based on individual its based on trends. And they can do so, it is not against IRDA rule. Logically, why would one put money when in the past they have lost money on the same thing. Motor Insurance is the largest business of any Indian insurance company and also the most loss making one. The industry avg (for pvt cos) is 1:1.1 i.e. for every rupee earned they give out rs1.1 as claims!

So, dont take it to heart. And your NCB can be moved to a new insurer too, just do it before it expires.

I had the same problem in 2010 while my 1996 E220 insurance came up for renewal. I was following up with the company nearly for 7 weeks prior to the expiry of the insurance and they didnt give me a quote at all.

I escalated this matter to their grievance officer and the response was like you are talking to a deaf person. Then I really got annoyed with their arrogant behaviour and escalated this to IRDA. I believe this worked and atlast they gave me a premium quote which was nearly 250% more than the previous one. And the pity is that they have insured the vehicle for the past 6 years.

The company in discussion here is HDFC Ergo. This left a very bitter taste about HDFC Ergo among my friends circle.