Indian Auto Insurance Rates, Indian Car Insurance Rates, Indian Car Insurance Rate, Indian Auto Insurance Rate

By: EconomyWatch   Date: 26 May 2010

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Indian auto insurance rates are regulated by the state-owned Insurance Regulatory and Development Authority (IRDA). Despite this, auto insurance companies possess great flexibility to determine the Indian auto insurance rates for any policyholder.

Indian car insurance rates will not remain the same at every renewal. They tend to change due to several reasons. Insurance rates change due to both negative effects (such as traffic violations) and positive reasons (such as a good driving record).

Why Do Indian Auto Insurance Rates Change?

Traffic violations: If a traffic ticket has been issued or if you have been involved in a road accident, then be prepared to pay higher premiums the next time. Insurance companies take note of every penalty issued against the policyholder for traffic violations. Thus, the company will consider the policyholder with a history of traffic violations as having increased risk potential to file a damage claim. As the risk level rises, so do the Indian auto insurance rates.

Contrary to this, Indian insurance companies offer discounts for observing traffic laws and possessing a good driving record.

Adding a new car: If an individual decides to add a new car to the insurance policy, s/he will have to pay a higher premium. The market value of a new car is high and so is the repairing cost. This tends to inflate the insurance premium. Again, if a sports car has to be added to the policy, the premium will become really expensive, since sports cars are meant to be driven faster and are highly prone to accidents.

Number of drivers: Insurance companies allow for the addition or deletion of drivers from the policy. Adding a new driver will increase the Indian auto insurance rates. If the newly added driver is young, then the premium will rise substantially due to the driver’s lack of experience. However, removing an insured driver from the policy will have a positive effect on the insurance rates.

Change in laws: In India, the Motor Vehicles Act requires mandatory third party insurance for every driver. So, a change in the law is sure to affect the insurance premium. For instance, if the insurance authority increases the minimum liability coverage, then it will reflect in your car insurance rates.

Insurance company's decision: To a great extent, the insurance companies hold the power to determine your car insurance rates. They prepare risk ratings for every policyholder and estimate the insurance rates accordingly.


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