I didn’t make a claim against my car insurance, why is my premium increasing?

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We all want to pay lower car insurance premiums! It’s one of the main reasons why motorists refrain from making a claim against their insurance policy - it helps them unlock no claim bonus which can reduce the annual cost of a policy by up to 50%. However, despite this, there might be occasions where our insurance premium increases, leading us to feel cheated! However, there might be some plausible reasons for this, let’s find out more!

Rise in third party premiums.

Right, if your car insurance has risen without you making a claim, this is probably the reason for it. The premium for thirdparty insurance is increased every year and this result in a higher premium on your car insurance policy. Why does this happen? Well, the IRDAI hikes the rates for third party premiums every year and insurance companies simply integrate these new rates into their plans. The IRDAI does this because every year new vehicles are added to Indian streets. This results in higher risks of an accident and that’s why it costs more to provide insurance!




Personal accident cover.

Late last year, the IRDAI announced that the compulsory personal accident coverage would be increased from Rs 1 lakh to Rs 15 lakh. Though this is good news as policyholders are now entitled for a higher pay out in case of serious injuries, it also meant that the cost of the plan would increase. The premiums on bike and car insurance would both go up due to this increased personal accident cover. The previous personal accident cover came at a cost of Rs. 100; however, the new personal accident cover will cost Rs. 750 plus applicable taxes. This is could be one of the reasons why your car insurance premium has increased, even if you haven’t made a claim recently.



In the future.

The transport department is mulling over an idea that could increase the cost of your premium even if you do not make a claim. This is because they are planning to link motorinsurance premiums with driving records. Therefore, if you have a history of traffic offenses, you could get a higher premium. However, on the flipside, if you maintain a clean record and drive safely, you will also be entitled to get a lower premium amount as well. So this new mandate, if introduced, will work both ways and will incentivize good road etiquette.

So if you’re premium has gone up even in the absence of any claims in the past, do not be alarmed or feel cheated. Just enquire about the reasons for the same. Chances are it will be one of the aforementioned aspects that have caused your premium amounts to spike. If it is not and your insurance premium has simply been increased without any reason, maybe it is time you switched to a new insurance provider. Hope this has been helpful, good luck and all the best, remember to always wear your seat belt and drive safe!

Comments

  1. Insuranceonline13 January 2021 at 17:10

    Thanks for sharing the blog, seems to be interesting and informative too. National Car Insurance

    ReplyDelete

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