IRDA Revises Third-party Insurance Rates: Here is All You Need to Know

 The Insurance Regulatory and Development Authority (IRDA) has introduced some changes to third-party insurance by introducing revised third party insurance premium rates for some categories of vehicles. The new premium rates have been in force from April 1, 2017. With this announcement, changes in terms of premium rate are visible in the good carrying vehicles or public carriers. Three wheelers are excluded, however.

The IRDA’s recent report dated March 28, 2017, indicated a massive hike in premium rates for goods carrying vehicles, which went up to 40%. The rate varied depending on the load. If take the example of previous rates range between INR 15,365- INR 24,708. This rose up to INR 23,047-Rs 37,062 with the increase of premium rate.  It was also on news that truckers in the South went on strike for 10 days protesting the sheer hike in the compulsory auto third-party insurance. They also held discussions with the concern regulatory body asking for a reduction in rates.

With the new announcement made by IRDA, significant changes have been visible. Let’s take the above example. Applying the new rules, now the rates range from Rs. 21,511 – Rs. 36,120 to Rs. 19,667-Rs 33,024.

The premium for private cars is affected as well especially those exceeding 1000 cc and 1500 cc, including special types of vehicle, agricultural tractors and two wheelers.

Revised Premium Rates:

Vehicle Type Previous Rate New Rate
Cars with engine capacity (more than 1,500 cc) 8,630 7,890
Cars with engine capacity (less than 1,000 cc) 2,055 No change
Goods carrying vehicles or public carriers (Exceeding 40,000 kg) Rs 36,120 Rs 33,024
Mid-segment cars (1,000cc – 1,500 cc) Rs 3,132 Rs. 2,863

The two-wheelers are also introduced with reduced premium rate. Similarly, reduction has also affected e-rickshaws or other passenger-carrying vehicle.  However, if we compare the current economic, the premium rates are still higher.

What is Third-Party Insurance?

Also famous as an ‘act only’ policy, the third-party insurance protects against the actions of the third party. This policy covers claims for damages or losses caused by you to a third party. It is a kind of insurance purchased by the first party-the insured, by the second party-an insurer, for ensuring financial assistance against the claim of others-the third party. The first party wouldn’t get any benefits in this event. This plan is mandatory by the law for all car owner at the time of purchasing a car.

 

5 Benefits of Having Add-on Coverage for Your Car

The adequacy of a car insurance plan is felt most when your car meets an accident and gets damaged or when you rush for the police station to file a FIR against the theft of your vehicle. In both situations, a standard motor insurance will ensure monetary assistance to help you financially. Though a maximum amount of your loss is being reimbursed by the insurer, your pocket still feels the pinch. There are always some expenses, which you need to pay by own or comprehensive car insurance plans don’t cover. Here, come the add-on car covers in the scene!

 

Unlike the past years, where general insurance companies in India offered standard motor insurance, a plethora of additional coverage is served to meet the extra expenses, along with your main insurance policy. In addition to own damage or third-party liability, these add-on plans offer several other benefits. These add-ons are very useful and the best part is that they don’t cost much. Nevertheless, before coming to a conclusion, one you should look under the hood of each of these add-on cover to get a hands on it.

Engine Coverage

You will find no insurance fine print copy, which includes damages that caused to car engine due to negligence or wear and tear. You are smart enough to estimate the hefty repair cost incurred as the engine is the most expensive part of the car. In the events like car engine breaking down due to running without engine oil, waterlogged or negligence, your insurer wouldn’t provide any assistance. However, this is a rare case, but safety matters and here an additional cover may save you from being insolvent.

Roadside Assistance

 This has been proven as a useful feature for women or elderly persons. This assistance is designed to provide roadside help in the event of your car running out of fuel, tire puncture, collapse due to any reason. With this add-on you can avail help from the insurance company in arranging for fuel, repair the flat tyre or towering facility to the garage if required.

Zero Depreciation

 With a normal car insurance plan, you will get only the depreciated value of the car parts damaged in the accident. This is okay with the low priced cars. However, highly priced car owners have to suffer if damages occur which need to be replaced. With a zero depreciation add-on, you can avail the full value of the part. However, this is not applicable to the older cars, mainly the cars older than 5 years. Also, the safe drivers can ignore this.

Retain NCB

 No Claim Bonus is offered for every claim free year where the policyholder gets a discount on premium. However, even a single claim is made, the NCB turns to 0% with no time. By purchasing an NCB retention add-on, you can protect your earned NCB. With this NCB, if you make a claim, your NCB will be protected to some extent, instead of becoming ZERO percent.

 

Daily Garage Grant

 

This add-on is very useful for those who are highly dependable on their cars. Daily garage allowance cover comes handy when your car has gone for repairs. You will be given a daily allowance of INR 500 for 14 days if the car is in the garage for more than two days. However, the amount and number of days may vary from insurer to insurer.

 

 

Adding an additional cover with your main car insurance policy, you may require paying some amount from your pocket but would guarantee a financial security towards any damage or loss of your car.

 

Three Ways to Cut your Car Insurance Premium

After you buy a car, the next thing you buy is a car insurance plan. As per law, it is mandatory for every vehicle owner to buy motor insurance for his vehicle plying on the Indian roads otherwise, they will have to pay a hefty fine. Before you buy a car insurance policy, compare car insurance policy so that you get the best. Buying the first plan that you come across is a big no.

Every vehicle owner wants to save his money on car insurance. The vehicle owners are always looking forward to the ways that can help them to cut their car insurance premium. If you want to reduce your car insurance premium, here are the ways that can be helpful for you.

Shop Around

In case your car insurance policy’s due date is approaching and the annual premium of your insurance has hiked up then you must in order to obtain quotes from various insurance providing companies. By doing this, you can come across different quotes for car insurance plans by various insurance providers. You can buy the one which gives you the maximum coverage at the minimum price.

The thing to keep in your mind is that cheaper plan doesn’t ensure that it is better. It might be better in the monetary terms but as an insurance buyer, you must pay attention to the coverage that this a specific plan offers. CSR- Claim
Settlement Ratio
also plays an important role. CSR is the insurance providers ability to pass a claim.

Install Anti-Theft Devices

Anti-theft devices can enhance the security and the safety of your car. When your cars’ safety is improved, your insurance provider offers you a discounted premium as your car is less prone to theft, all thanks to the anti-theft devices that you have installed in your car.

Various insurance providers offer a discount when you install particular anti-theft devices. Before you install an anti-theft device in your car, make sure that you cross check with your insurance provider so that you can cut your car insurance premium.

Get Rid off the Unnecessary Coverage

Drop specific coverage that is not required by you. We know that it could be difficult for you as you can’t predict when or where an accident can take place. Assess the coverage that you have opted so that you can come across the unnecessary coverage and get rid off it. ,

For instance, if a person drives a very old car then, there is no point in keeping the collision cover. Getting rid of an insurance cover doesn’t mean that there is no way that you’ll be needing that particular cover in the future. It means that chances are less that you’ll need it. The insurance covers you buy are based on the assumptions only. Isn’t it?

The least required insurance cover can be dropped when an individual is looking forward to cutting his/her insurance premium so that his insurance needs are fulfilled.

 

How are Third-Party Insurance Liabilities Settled?

Purchasing a third-party motor insurance is compulsory for all the automobiles plying on the Indian roads. In the case of an accident, a third-party insurance claim can be filed so that the compensation for the damages and the injuries can be obtained.

In a case, you’re involved in a road mishap and you’ve suffered bodily injuries and damages on your property because of somebody else’s fault, the law allows you to register a claim and demand compensation from the owner of the involved automobile.

For the convenience of the policyholders, the claims process has been nade simpler by the insurance providers. Still, it is recommended to the policyholders to better to know the ins and outs of the claims filing process. This article will be your helpful guide.

What is a Third-Party Liability or Insurance?

The Third-party liability or insurance is a basic kind of vehicle insurance plan offered by general insurance companies.  According to law, it is mandatory to have a third-party cover for every automobile plying on the Indian roads.

Claims Filing Procedure

In a case you’ve suffered a road mishap, you can file a claim against the owner of the involved vehicle. In the event, your automobile is involved in any accident and it results in bodily injuries, death or damages to a third-party or its property, the third-party can file a claim against you as your vehicle was involved in an accident. The claim would be settled by your insurance provider.

The claims registering process varies as it depends on the consequences or nature of the accident. Mentioned below is the basic claim filing process specifically for the third-party liability cover.

Property Damage

  • In the case of a road mishap, property damage is caused to a third-party, the affected individual can register a claim through theMotor Accident Claims Tribunal.
  • The person filing the claim should get the insurance details of the involved automobile and register a First Information Report at the nearest police station.
  • The insurance details along with the FIR needs to be submitted at the time of registering the claim.
  • On the basis of the tribunal’s decision, the compensation would be provided to the person who has filed a claim.
  • As per the law, the highest amount that can be offered as a compensation regarding the property damage is Rupees 7,50,000.

Bodily Injury, Disability or Death

  • In case a road mishap results in any bodily injury, disability or death of the third-party involved, the third-party or his/her dependents depending upon the case can register a claim in order to get a compensation from the automobile owner.
  • A FIR needs to be registered at the nearest police station. The FIR must clearly state the series of the events and the details of both the parties involved.
  • The vehicle owner’s insurance details must be obtained.
  • The information mentioned above must be presented to the Motor Accident Claims Tribunal as per the jurisdiction.
  • The tribunal will deliver its ruling on the basis of the submitted documents.
  • There are cases, where the automobile owner wants an out of court settlement. It is allowed by the law.

Beginners’ Guide to Choosing a Motor Insurance Plan

A motor insurance policy is an insurance that one never hopes to use especially in the case of an accident. According to the law, buying motor insurance is mandatory for every vehicle owner in India. You can’t assume that your vehicle would never be vandalized, stolen or be damaged in any accident. If these unfortunate incidents happen, the damage/repair bills can be a huge risk for your financial security. That is why having an insurance plan is absolutely necessary so that your financial safety is never exposed to any kind of risk.

Buying a car insurance plan is not that tough. But, buying the best insurance plan might be a little difficult as you need to be well informed. The premium depends on the condition of your vehicle. Here is the beginners’ guide to selecting an automobile insurance plan.

Deductible

The term “deductible” means the money that you would have to pay from your pocket in case you file a claim. Deductible shares an inverse relationship with the premium. If the deductible is lower, then, the premium would be higher and vice versa. Think carefully before you go for a lower deductible.

Your Area of Residence Matters

If you live in urban area, your premium amount would be higher; if you live in the rural area then your premium would be lesser. In urban areas, vehicles are more prone to theft, break-ins and accidents etc.

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Your Insurance Should Be Sufficient

Being under-insured or over-insured is of no good. If you are over insured, you are just wasting your money and if you are under-insured then the purpose of having an insurance plan is not fulfilled. You would have inadequate coverage. In the end, you would have to pay for repairs from your own pocket.

The Model of your Car

Insurance premium for the top model cars such as Audi, BMW, and Mercedes is way higher than the premium for the basic model cars. The reason behind that is damage repair cost of expensive cars is also higher; hence the premium rate is higher.

Affordable Coverage vs. Adequate Coverage

When it comes to coverage, striking a perfect balance between affordable coverage and adequate coverage is important. Generally, issuance buyers want to have enough coverage and they don’t want to pay much for a premium. If you don’t want to pay much for your 4-5-year-old car, it is fine. But, if you have a brand new car, if adequate coverage costs you a high premium then it is totally worth it

Avail Discounts

Motor insurance providers offer various discounts on the base of numerous factors mentioned below.

  1. Installation of car security system
  2. If you don’t file for claim, you are offered NCB discount for a claim free year.
  3. If you are a member of any automobile association.

Now you are aware of ins and out of insurance. Before you buy insurance always compare so that you get a good plan. Having motor insurance plan safeguards you and your vehicle from potential risks.

 

 

Tips to Find the Right Car Insurance Policy

Buying the right car insurance plan for your car is a tough task in itself unless you know the important tips that should be acknowledged while buying a car insurance plan. You must have noticed that auto insurance agents or broker try to sell their products. However, it is important for you to choose the insurance policy carefully after going through the benefits and coverage of the insurance policies. It is always advisable to compare between different insurance plans from multiple insurance providers to get the better offering and the best deal.

Increasing gas prices are elevating the cost of owning a car. Therefore, it is worth seeking different ways to cut other car operating expenses. You can lower the cost of car operations by buying a car insurance policy. According to the Indian Motor Vehicle Act all vehicle should be covered under a third-party insurance plan that provides protection against legal liability against the expanse that might incur due to loss or damage to third party or its property.

Today insurance companies are offering comprehensive plans that offer coverage against multiple miss happenings that can cause additional expenses. Check out some important tips that can help you to buy the right insurance plan from the market below:

  1. Do an Annual Rate Check: Compare the rates from other insurance companies to get the best deal in the market. You can easily find insurance comparison tools where you can compare between different plans on different basis. Some insurance companies or insurance agents or broker also offers personalized quotes not immediate but after sometime. Online shopping is one of the best time-efficient ways to find a better deal.
  2. Select a Plan from Branded Insurer: It is always seen that well-known or branded insurers do well, as they are better than others with their claim settlement procedure, renewal procedure, and non-claim benefits. So before buying any car insurance policy make sure you check the full Ratings of the insurer companies and real customer reviews.
  3. Maintain Good Credit: Keep your eyes on your credit score because in many cases a low score can increase the premium amount of your car insurance policy.
  4. Choose the Right Deductable: in case you set a high deductible, you premium get reduced, but you have to bear huge amount out of pocket in case of any unfortunate events like an accident.
  5. Read the Policy Wording: Make sure that you check the coverage and benefits offered under your policy. Also ensure that the policy offers enough liability coverage for third party bodily injury and property damage. This is true that the medical costs and risk increases, and therefore your coverage should too. Always select a plan after evaluating the value that might incur due to different possible risk.
  6. Choose the Right Car: Car insurance plan also offers coverage for own damage and it is the big part of the price of auto insurance. Insurance company offer cashless garage facilities for own vehicle damage in case you meet with any accident and occur damage to your car.

Buying a car insurance policy is bit tough as there are number of car insurance policies available in the market. But following the aforementioned important tips you can easily reach out the right insurance plan for your four-wheeler. It is always advised to buy insurance online because it saves lots of time and money.

 

Why Third-Party Liability Insurance Is Mandatory In India?

In India, under the guidelines of Motor Vehicles Act, 1988, buying a third party insurance plan is mandatory for every vehicle that needs to be drive on the roads. Whether, the vehicle is used for social purpose, pleasure purpose, domestic purpose or the business purpose, the vehicle should be insured under a third-party insurance plan.

Insurance is a product wherein the insurer charges the premium, to pay the owner driver of the insured vehicle, a sum of money in the event of any miss happening that causes additional expenses due to loss or damage to third party or its property.

Motor third-party insurance is a mandatory requirement under the Motor Vehicles Act. It is known as a ‘third-party’ cover because the beneficiary under this policy is third party who is someone other than two parties involved in the contract i.e. is the insurance company and owner/ driver of insured vehicle. This plan does not offers any benefit to the owner drive of the insured vehicle; however it covers his/her legal liability that might occurred due to death/injury of third party and/ or damage to its property.

What is Third Party Insurance?

There are two basic different types of insurance that helps you in the damages case. One is Third Party liability insurance and the second one is first party insurance.

A third-party insurance policy is a motor insurance plan, which offers indemnify the owner driver of the insured person, in case he or she is legally liable for damage or injuries occurred to a third party r its property respectively.
Benefits and Coverage of Third Party Insurance

  • Third-party insurance is mandatory for all vehicles. This provision cannot be ignored by any clause in your motor insurance policy.
  • Third-party insurance does not cover injuries or any damage to occur to the owner-driver of the insured vehicle, but to the third party who is injured by the insured vehicle.
  • It provides coverage to the third party insurance that is the injured due to the insured vehicle. In such cases the insurance company pay directly to the third party or his nominee and does not even pass through the hands of the owner of the insured vehicle.
  • Under third-party insurance policies the premiums remains the same even after the value of liability exceeds the estimated value because it is not possible to know the exact value of liability that might incur due to an accident.
  • To avail coverage under the third-party insurance you will have to prove the fault of the insured first and also that injury occurred from the insured are covered under the plan.

If you are looking for the third-insurance plan in the market, start searching plans online. You will surely find some amazing plans with comprehensive coverage and benefits. Before buying any plan online or via insurance agent or broker make sure the policy offers coverage and benefit that you need. For further assistance to any insurance plan you can contact the customer care of the insurance company or you can take help from an insurance agents or broker.