Car owners will be seeing a significant drop in their insurance bills from mid-February as the regulator has slashed the insurance premium rates.
According to the fresh circular issued by Insurance Board (IB), the premium rate for private vehicles has been slashed by 25 per cent for vehicles valued at less than Rs two million and those valued over Rs two million will be charged 20 per cent less premium than the existing rate. The new premium rate will be applicable from February 13.
However, this reduced premium rate is only applicable to insurance policies that cover loss and damage risks. It is not applicable to third party liabilities and vehicles covered under risks group policy.
“We observed that the number of claim payments against vehicle damage policies were proportionately quite small, so we decided to revise the rates,” informed director at IB Shreeman Karki.
At present, a private vehicle’s premium ranges between 1.6 per cent and two per cent of the selling price, based on the age of the vehicle and engine capacity. For older vehicles, which have been used for more than 10 years, an additional 10 per cent is charged as premium.
For example, anyone buying a new Maruti Suzuki Alto Lxi, which is priced at around Rs 1.65 million, before February 13, will have to pay approximately Rs 32,000 as insurance premium for the vehicle policy to cover loss and damages arising due to accidents. However, if the buyer opts to buy a policy after February 13, the same policy will cost 25 per cent less — Rs 8,000 less.
“A larger number of claims that insurance companies has to settle is coming in from commercial vehicles, while private cars used for everyday commute is less likely to get into a lot of accidents,” reasoned Karki. “Lesser premium liability will also encourage more people to get covered by insurance.”
By the first quarter of the current fiscal, insurance companies have received Rs 1.19 billion as insurance premium for vehicle policies and have settled claims worth Rs 512.8 million. Till mid-October 2013, 17 non-life insurance companies have issued 138,175 vehicle insurance policies.
For non-life insurers, vehicle insurance is the largest portfolio as it contributes more than 40 per cent of the total premium collection.
source: the himalayan times,6 feb 2014
LINK
According to the fresh circular issued by Insurance Board (IB), the premium rate for private vehicles has been slashed by 25 per cent for vehicles valued at less than Rs two million and those valued over Rs two million will be charged 20 per cent less premium than the existing rate. The new premium rate will be applicable from February 13.
However, this reduced premium rate is only applicable to insurance policies that cover loss and damage risks. It is not applicable to third party liabilities and vehicles covered under risks group policy.
“We observed that the number of claim payments against vehicle damage policies were proportionately quite small, so we decided to revise the rates,” informed director at IB Shreeman Karki.
At present, a private vehicle’s premium ranges between 1.6 per cent and two per cent of the selling price, based on the age of the vehicle and engine capacity. For older vehicles, which have been used for more than 10 years, an additional 10 per cent is charged as premium.
For example, anyone buying a new Maruti Suzuki Alto Lxi, which is priced at around Rs 1.65 million, before February 13, will have to pay approximately Rs 32,000 as insurance premium for the vehicle policy to cover loss and damages arising due to accidents. However, if the buyer opts to buy a policy after February 13, the same policy will cost 25 per cent less — Rs 8,000 less.
“A larger number of claims that insurance companies has to settle is coming in from commercial vehicles, while private cars used for everyday commute is less likely to get into a lot of accidents,” reasoned Karki. “Lesser premium liability will also encourage more people to get covered by insurance.”
By the first quarter of the current fiscal, insurance companies have received Rs 1.19 billion as insurance premium for vehicle policies and have settled claims worth Rs 512.8 million. Till mid-October 2013, 17 non-life insurance companies have issued 138,175 vehicle insurance policies.
For non-life insurers, vehicle insurance is the largest portfolio as it contributes more than 40 per cent of the total premium collection.
source: the himalayan times,6 feb 2014
LINK
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