The Insurance Regulatory and Development Authority's decision to increase third party premium rates in a de-tariff market from January next year is being opposed not only by truck operators' associations, but also by private car owners.
The third party premium has been increased from the current Rs 700 to Rs 2,500, a 257 per cent hike for private cars, where the cubic capacity of the vehicle exceeds 1,500 cc. Cars, including Chevrolet, Fiat, Ford, Honda, Hyundai, Mahindra, Maruti, Mitsubishi and Skoda, fall in this category.
Private car owners said compared with commercial vehicles that have a third party claim ratio of over 200 per cent, the claim ratio of private cars is much lower. However, the premium for commercial vehicles has been increased by 150 per cent, while that for private cars has been increased by 257 per cent.
The Western India Automobile Association, a body of four lakh members from Maharashtra, Gujarat, Madhya Pradesh and Goa, has written to the Irda to reconsider its decision and it will be meeting the regulator shortly.
"Private cars are well maintained and have a third party claim ratio of 40 per cent. Vintage cars are used only in rallies, where the engine capacity is 2,500 cc. Trucks are driven on highways for around 7,500 km a month, while private cars are driven for only 750 km a month. The premium for trucks, buses and commercial vehicles has not been revised in the last 10 to 15 years, since their associations threaten to go on strike, while our premium was increased by 70 per cent based on the recommendations of the Ansari Committee five years ago," said Nitin Dossa, executive chairman of WIAA.
"About 60 per cent of the cars don't go out of Mumbai. Claims due to drunken driving come from tourist cabs and taxis, which are few. We