If you own a vehicle, then you would definitely be paying some premium towards the insurance of your vehicle. Well, come 1st April, be prepared to shelve out more towards motor insurance premium as the insurance companies hike the premium by 15 to 20%. Some industry experts say that such a hike comes in the face of many factors, one of the major being the dismantling of motor third party pool.
Insurance regulatory Development Authority (IRDA) had earlier stated that from 31st March, 2012 a major change in the scenario of motor insurance would be the dismantling of the third party pool. Few others claim the increase in claim ratios in various other segments of motor insurance has led to this hike in motor insurance premiums. The own-damage vehicle insurance premium is also set to go up.
The IRDA had created the Motor Third Party Declined Risk Insurance Pool in December last year with an aim to provide mandatory third party cover for commercial vehicles. However, IRDA is now dissolving the same body due to the huge losses being claimed by the insurers. The total motor premium during 2010-11 was at Rs 16,879 crore, while the expected ultimate loss is Rs 17,432 crore. With motor insurance set to get dearer, this will affect the industry sales which is now seeing a positive revival after being in slump for so many months.
Source – Business Line
