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-   -   Insurance premiums vs claims - Would 'Self Insurance' be cheaper for you? (https://www.team-bhp.com/forum/indian-car-loans-insurance/161306-insurance-premiums-vs-claims-would-self-insurance-cheaper-you-3.html)

insurance should usually depend on car spare part prices. Keeping a jeep in depcap or a cheap car on comprehensive insurance is foolish but keeping a car with expensive spare parts say a German makes total sense. Eg. Pajero Sport may not look like an expensive to maintain car but when it comes to spare they are like buying gold. Full Tail Light is around 15k per piece and the front bumper and grills come out at 1.5lakh so in any case you even have a fender bender you are better off insured. Now saw a Jeep or an Alto, the spares are cheaper than insurance itself.

Going slightly off-topic -

Am wondering if self insurance makes more sense for two-wheelers. While conceptually there is no difference between insurance for a 2-wheeler versus 4-wheeler, I believe there should be a big difference in the percentage of people claiming insurance for accidents on bikes vs cars(I don't have data to validate this though).
For most of the regular bikes (costing <1 Lakh), fixing minor accidents cost few thousands at worst and most people are reluctant to go into the hazzle of claiming insurance. None of my friends have ever claimed insurance on bike even though we go quite often on long rides and there have been definitely few accidents. However in the case of cars even minor accidents run up to huge bills necessitating claiming the insurance.

past performance is no guarantee of future results

The rule applies while we are insuring our cars too.

More vehicles on road, higher speeds, not much road expansions happening = more chaos, accidents = necessity of getting comprehensive insurance as much years as possible.

The True Self insurance would make sense if numerous like minded people come together and pool up money.

This has been practiced in shipping for ages. However it is opposite to concept being discussed here. The 3rd party insurance if often by a conglomerate of Ship Owners who pool money to buy at cost insurance cover. These are called Protection and Indemnity Clubs.

Coming to the topic of 3rd Party vs Full Comprehensive, after nearly 8 years of driving, I had that unfortunate day of collision with stationary car. So can happen to anyone anywhere. Hence better buy Comprehensive. After shifting to UK i am realising that premiums we pay are miniscule anyways. TO save money I would rather relook at my spending habits. Only once convinced that there is no room to filter wastage, I would look forward to saving on such expenses.

IMO the question of what type of insurance to buy is subjective and depends on type of car, running, age, city/highway running.

In our case, the Baleno is pretty old now and is mostly used only in the city. After 7-8 yrs of ownership I suppose that repair costs might be higher than accident related expenses. Cost of spares is high but most blemishes can be addressed by FNG. So buying comprehensive insurance for 15k sounds pointless to me. So we got only 3rd party liability insurance for this car which was 5k with tax.

Whereas for a car with expensive spares and more highway running, it makes sense to buy 0-dep. Even though it is expensive. I am hoping to not use it, but just in case.

Over the years, it appears to me that insurance has become a vicious circle. Insurance was initially bought to mitigate risk of immediate and unexpected cash flows. But over the years, especially health kind, has indirectly led service providers (auto, health, etc.) to hike their service fees just because the consumer has insurance. And of course, the insurance company will hike its premium because services have become expensive. :)

My two cents on this.

CARS

As long as testing standards before granting a Drivers License remain the same I need to buy Comprehensive Insurance.
However safe you drive there are idiots on the road who will rear end you, side swipe into your car or hit your parked car.

On the second day of my car i had a underage rider hitting my car, because of which 2 doors were replaced at the ASS.
I paid the compulsory deductible.
For the next 4 years there were no incidents.
Fast forward to 2014, I have shifted from a less populated Manipal to more populated Mangalore.
There have been 3 incidents (rear ended by an Omni filled with school children, Side swiped by an KSRTC bus overtaking me from the left, and the third time the corner of the bumper has been scraped when it was parked) For the first 2 of these i claimed Insurance. The last one is recent and yet to be repaired.

I would recommend Comprehensive Insurance as these can happen to anyone!

Bikes

Fixing a bike is cheap compared to a car. Can be paid out of pocket. But the fear of theft keeps me with Comprehensive insurance

My Bullet 350. Has had one incident where the headlight needed to be changed. 14 years, no claims ever.
The IDV has gone down but the resale value of the bike has doubled its invoice price. Always wanted to go for Third party insurance but the fear of theft made me stick onto Comprehensive. Don't know how valid that is considering that the IDV is only 25 percent of its resale value.

My Yezdi Roadking. More than 15 years old. No Comprehensive insurance possible.
No incidents since the time i have acquired it, the usage is low too around 2500 kms a year. Fear of theft is again there. Would i buy it if was offered? YES as long as the IDV matches the bikes resale value. But such policies are not available.


A question to the Vintage gurus, don't know if they would read this since they hardly seem to be active on other threads. Are the vintage cars and bikes insured from theft to their full value? How is the value ascertained in such cases.

My 2 cents: I strongly recommend going for comprehensive insurance, extended warranty, AMC, etc etc as far as possible. Especially in the last 5-7 years with more and more technology coming in, number of faults have started increasing. I am talking about everything in totality including cars, phones, laptops, ACs, fridges, water purifier, microwave, tabs and what not (we really are in an electronic world!).

I calculated my total outgoings for safe guarding myself vis-a-vis what I would have to spend to repair the items over last 3 years and I am very much in the positive by safe-guarding myself.

Real numbers talk for me ... and I will continue and also continue recommending maximum protection possible.

I have been paying for comprehensive insurance on my 8 year old indica, but have found myself paying for most of the damage myself because
1. repairs are faster
2. no impact on NCB
3. the gap between quotes from a local bodywork specialist vs quote from a workshop with a paint booth after various deductions(scrappage, depreciation, plastic parts exclusions) is not that great for small work (1-3 body panels + some plastic)

I am begining to wonder if there is really a purpose to paying so much (around 5K for a car that can fetch 1L or so in resale)

Are there any other redeeming virtues for getting comprehensive insurance for older cars?

Since the car is quite old now,there is no point in going with a comprehensive insurance.There are two options left.Next time, when the policy comes for renewal get the NCB certificate from the insurance company and renew it as fresh policy(in case of sale,you may get good price).Or,just take the third party insurance.The NCB certificate will be an asset,if you are buying a new car.

Does Third party Insurance renewal also gets NCB benefit? Or its treated as a fresh policy every year and you pay the full premium amount every year?

I think businesses people can claim car insurance premiums and any repairs as a tax deductible expense.

In case you're not Bill Gates' poker partner, then a 3rd party insurance will suffice.

IMHO this NCB is quite a flaky concept. Even if you make a Re. 1/- claim, NCB resets to 0.

It's only applicable for your personal damage part of a comprehensive insurance (C.I).

Purely for illustrating this, assuming you have to renew your C.I. Its premium is say Rs. 100/-.

Assume you've got 30% NCB. Your premium is not Rs. 70/-.

In CI your personal damage component is 80%. So this is the one that's discountable.

Your premium is 56 + 20 = 76

That 20 shown above is the 3rd party liability.

NCB is not applicable for 3rd party liabilities.

The distinct advantage of going in for the comprehensive insurance will be reduced liability on your in case of claim as depreciation are applicable on the repair parts. Plus you can claim NCB deduction on the OD premium. The only negative is your NCB gets nullified in case of claims.

TPL is the minimum requirement to have on the Insurance of the vehicle


No TPL does not get the NCB benefit as it is applicable only on the Own Damage premium.

My car is around 75% depreciated. that means they'll pay 25% of the part cost. after scrappage charges, the difference is minimal.

labour - Typically if i need to do as and when something happens, I'll need to do each panel at a time.

I find that waiting for two years until the car collects and assortment of dents and dings and then doing full bodywork & repainting is cheaper - unfortunately, for that I am not able to claim insurance.

Enjoy comprehensive insurance while you can - you only have <2 years left :D. Good luck finding comprehensive insurance for cars over 10 years old. You'll only get 3rd party, and that too after some hunting.

IIRC, the 3rd party component alone is 4,000 odd bucks today. Considering you have NCB also, there won't be much of a cost difference in comprehensive & 3rd party for you.

Nope. And it's a fixed amount. No difference from company to company.

There's nothing flaky about it. NCB rewards those who keep their cars safe & accident free. A lot of us enjoy NCB benefits (have enjoyed upto 65% NCB).

Far as I know 65% NCB got canceled after 2003. You may have renewed your policy around that time.

From 2004 the maximum is only 50%.

I should reword that. Only those who renewed policies by 2003 can continue to enjoy 65%.

PS: At most one or two years +- in my statements. Now you can't get more than 50%.