Car insurance policy holders to pay more for making claims

Non-life insurers have raised deductibles by three times on motor own-damage policies.

Motor insurance holders will have to dig more into their pocket for claiming the non-life insurance as deductibles on motor own-damage policies have being raised three times. Deductible is that part of policy cover which is to be borne by the policy holder.

The move has been implemented to caution the policy holders from filing claims for trivial incidents. Car owner will now have to bear Rs 1,500 for a claim of Rs 5,000, while it was earlier merely Rs 500. The companies claim that the increase is also because the claim size, labour cost and transaction sot have gone up quite considerably. The increase will also help insurers limit the claim ratio to 5 per cent and discourage owners from abusing the policies.

The premium on the motor insurance is decided depending upon the make and model of the car. Generally it varies between 0.5% to 1% of the sum assured. The companies earned at Rs 24,175 crore from motor insurance – that includes own-damage and third-party policies, with an increase of 31.34% from the previous year; while estimated claims worth Rs 17,000 crore have been funded last year.