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Are you a car owner? Find out the changes you can expect from July 1.

From July 1 expect a steep hike in your motor insurance premium for the new motor tariff policy will come into force and major changes are in the offing especially for private car owners.

In case you have a bad claims history get set to shell out a higher premium on policy renewal. But even if you have been a cautious driver with a claim-free record you do not stand to benefit much unlike earlier times. The new tariff policy allows a maximum discount of only 50 percent on premium in the fifth policy year and if you file even once for a claim within those years your discount on renewal will be nil and not reduced to the previous years level. In other words, no rewards for a claims-free past.

As per the new motor tariff policy all cars will be rated on the basis of cubic capacity. Which means advanced technology and safety features of your vehicle will not be taken into consideration. Your vehicle’s insured value will be determined on the basis of the insured’s declared value (IDV), which will specify the percentage of depreciation. Which means indemnity for total loss/constructive total loss will now be based on IDV instead of the earlier IEV or market value.

What is Insured’s Declared Value (IDV)?

For the purpose of Total Loss/CTL Indemnity and for Premium computation, IDV will be the Sum Insured. It will be determined and fixed at commencement or each renewal of your policy.

Fixing IDV:

For the purpose of fixing the IDV of the vehicle, the reinstatement value of the brand and model of the vehicle (with side car (s) and /or accessories if any fitted to the vehicle but not included in the manufacturer’s list of selling price of the vehicle) including the road tax paid, proposed for insurance at the commencement of insurance/renewal period should be adjusted for depreciation. The age of the vehicle will be considered at the time of insurance/renewal.

Given below is the schedule of depreciation for IDV Private Cars/ Motorised two wheelers

Following is the Schedule of depreciation for IDV Obsolete Model of Private cars and Motorised two wheelers.

Claims:

In case of claims the maximum liability will be the sum the vehicle is insured for or the insured's declared value which will be the amount payable in case of total loss or constructive total loss (CTL) irrespective of the market value of the vehicle. also in case repair costs go over 75 percent of the IDV it will be taken to be a CTL.

Do you have an anti-theft device installed in your vehicle? Well, heave a sigh of relief for you'll be eligible for a maximum discount upto Rs 500 on your insurance premium.

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