Tuesday, 13 June 2017

Third-Party Car Insurance to Cost More

Car insurance provides an extra layer of security and safety to your vehicle. When you are out on the road, anything can happen to you. There would be times, it won’t be your fault but you would suffer anyway. This is why having a motor insurance plan is important for the safety of your vehicle. Apart from providing the safety shield to your vehicle, it also provides financial protection to you so that you can be tension free.

Thanks to motor insurance, your vehicle is safe as insurance provides coverage against theft, accidents, any damages due to any road mishaps, natural and man-made perils etc. In addition to that, it provides personal accident cover as well. The coverage depends on the insurance provider that you have opted for and the insurance plan that you have zeroed down. On the basis of the coverage that you go for, the insurance premium is decided.

Insurance is such a personalized need and one person’s insurance needs vary from the others. To get the needed coverage you can always opt for the additional riders and ensure that maximum security of your vehicle.

Every year, inflation affects every industry. In the insurance industry, premiums are hiked annually. The percentage of hike vary insurance provider to insurance provider.

The third-party insurance premium is likely to hike as the concerned authorities have agreed to go forward with the third-party liability cap in case there are serious injuries or fatalities during the road mishaps. For the year 2017-18, approx 50 percent hike has been proposed by The Insurance Regulatory and Development Authority for a majority of the vehicles. As per the law, it is compulsory for the automobile owners to buy a third-party car insurance plan for their vehicles. Third-party liability insurance is compulsory and comprehensive insurance coverage is optional. 

A comprehensive insurance plan provides coverage for the third-party liability as well as own damage. The third-party damage is 30 percent only.  The Insurance Regulatory and Development Authority hasn’t proposed any hike in the third-party insurance premium for few types of vehicles such as Tata Nano, Datsun Go, and Maruti Alto along with the mini trucks and pick-up vans.

The Premium Deciding Factor
The premium deciding factor is the engine cc of the automobiles. IRDA proposes to hike the insurance premium of the vehicles having 1,000 to 1,500cc engines by 50 percent approx. The sources reveal that the hike can be finalized between 25 to 30 percent. Probably, the insurance providers would go for another round of hike when the Motor Vehicle Amendments Bill is passed with the provision that insurers will make payment of the complete compensation that is finalized by the motor vehicle claims tribunal.

Stand Alone Insurance Products Might Offer Lower Premium

Amidst the reports of insurers stressing on a substantial increase in
third-party insurance premium, a debate has been stirred on the topic -why third-party insurance isn’t sold as a complete insurance product instead of being attached to a comprehensive insurance plan to the automobile owners.

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