Long-term cover for 2-wheelers in works
Remember the popular Hero Honda punch line ‘Fill it. Shut it. Forget it!’ A similar concept is being developed by the general insurers for the two-wheeler industry. ‘Cover it. Forget it!’
By Debjoy Sengupta, ET Bureau |
KOLKATA: Remember the popular Hero Honda punch line ‘Fill it. Shut it. Forget it!’ A similar concept is being developed by the general insurers for the two-wheeler industry. ‘Cover it. Forget it!’
The General Insurance Council, in conjunction with non-life companies, is working on developing a long-term cover for two-wheelers. Covers will range between 3 and 10 years and bike owners will have the option of paying premiums at one go.
Confirming the development, Mr S L Mohan, secretary general of the Council - a representative body of all non-life cover companies, told ET: “We are working with actuaries and general insurers to develop long term insurance policies—both third party (TP) and own damage (OD) for the two-wheelers. The council is looking at the possibility of designing a policy that will cover two-wheelers for anything between 3 and 10 years.”
Presently, owners get to buy covers for a year, and if it’s not renewed at the end of the year, it lapses. Procuring a cover for a bike with a lapsed policy gets a little difficult as insurers are not always ready to renew them.
Third-party (TP) cover shields accident victims (other than the owner and the rider) while the own-damage (OD) portion insures the bike in case of an accident. Premium for a bike priced at Rs 50,000 is about Rs 900, which includes TP as well as OD. If there are no claims, bike owners receives a no-claim bonus on the premium to the extent of 20% in the first year and keeps on increasing by 5% for every claim-free year to a maximum of 50% discount. All these needs to be woven in the new long terms policy.
Mr Vijay Kumar, head motor insurance at Bajaj Allianz General said: “Currently, TP premiums are fixed by the regulator and is uniform across India. However, experience show that there are geographical locations where incidences of claims are very high. This makes the portfolio loss making. Insurers should be offered some lee-way so that they can factor in such high incidences in the premium while working out the long term policy.”
The General Insurance Council, in conjunction with non-life companies, is working on developing a long-term cover for two-wheelers. Covers will range between 3 and 10 years and bike owners will have the option of paying premiums at one go.
Confirming the development, Mr S L Mohan, secretary general of the Council - a representative body of all non-life cover companies, told ET: “We are working with actuaries and general insurers to develop long term insurance policies—both third party (TP) and own damage (OD) for the two-wheelers. The council is looking at the possibility of designing a policy that will cover two-wheelers for anything between 3 and 10 years.”
Presently, owners get to buy covers for a year, and if it’s not renewed at the end of the year, it lapses. Procuring a cover for a bike with a lapsed policy gets a little difficult as insurers are not always ready to renew them.
Third-party (TP) cover shields accident victims (other than the owner and the rider) while the own-damage (OD) portion insures the bike in case of an accident. Premium for a bike priced at Rs 50,000 is about Rs 900, which includes TP as well as OD. If there are no claims, bike owners receives a no-claim bonus on the premium to the extent of 20% in the first year and keeps on increasing by 5% for every claim-free year to a maximum of 50% discount. All these needs to be woven in the new long terms policy.
Mr Vijay Kumar, head motor insurance at Bajaj Allianz General said: “Currently, TP premiums are fixed by the regulator and is uniform across India. However, experience show that there are geographical locations where incidences of claims are very high. This makes the portfolio loss making. Insurers should be offered some lee-way so that they can factor in such high incidences in the premium while working out the long term policy.”
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