Presto...Insurance Premiums change ... once again

So we have another change in the premium for motor vehicles insurance.

By now all of us are familiar with my oft repeated terms Own Damage and Third Party covers.

The Third party premium is now being ceded into the All India Motor Third Party Pool from where there would be claims payment in respect of third party. The premiums were increased by about 150% on the average.

As expected, the truck owners went on strike and again as expected the government and the regulator have agreed to bring down the rates of third party cover. There is no surprise element in the above happenings and that explains the reasons for the repeated use of "expected".

The regulator would announce the new rates shortly and yours truly would again come back to you after the announcement.

For your reference the link of the news item is here

Venkat

Tariffs for Motor Insurance Go.....

So, as announced by the regulator, the tariff or regulated premium for motor insurance goes. While the Own Damage portion of the premium (i.e. the premium for the damage to your vehicle) has been freed from regulations, the Third Party premium is still regulated. The third party premium has increased for most category of vehicles and the administration of the third party premium and claims is not a matter of interest for the vehicle owner.

What would be of interest would be the movement of premiums for the own damage portion. Significantly the prices are expected to drop in most categories of vehicles and one would be richer by a few hundred or even a few thousands if he shops around for best price.

The correlation between the price and the service is not very clear and there is a possibility that your regular insurer on whom you have good trust may still be the cheaper one.

It would be an interesting situation to watch as motor vehicle premiums were relatively low even under the erstwhile tariff and it is further falling.

The last point of comfort for an ordinary customer is that the product (or the motor insurance policy) and its coverage remain the same across the industry. That is, the customer is comparing apple to apple when he checks the prices of various companies.

Venkat