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Home / Auto / Articles

Motor insurance sector to be overhauled

The motor insurance sector will soon see an overhauling. Hitherto a loss making area with exceedingly high third party claims even over 200 percent of the premium collected, an upward revision in motor insurance rates is on the cards if the Tariff Advisory Committee has its way.

The new motor tariff is expected to be finalized before the commencement of the next financial year. And the changes will include among others bringing down the bonus amount offered on no claims and imposing a limit of Rs 7.5 lakh on third party liability.

Increasing third party claims is a major reason why new private insurers namely Reliance General Insurance, Bajaj Allianz General Insurance, Royal Sundaram Alliance and Iffco Tokio Marine are reluctant about underwriting covers for old and commercial vehicles and have left it to the state owned insurers.

With the opening of the sector look forward to easy claim settlement procedures. Claim settlements will no more be a drudgery involving running around from pillar to post for several months but will be settled within a week or a fortnight’s time thanks to private insurers. Cashless claims management may also happen.

Claims may also be settled on the spot if the private insurer’s tie-ups enable such facilities. To top it all, Tata AIG General Insurance, a joint venture between the US-based AIG and the Tata Group has already introduced Mobile Claims Service in Delhi, Bangalore and Mumbai.

Going a step further in improving customer service, a temporary replacement car in case of a car breakdown can also be expected - some of the never before feel-good factors slated to happen soon.

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