 "Odd-even rule in Delhi could lead to lower motor premium")
Insurers said based on claims data, premiums could be reduced as risks from a vehicle’s usage would come down.
Mukesh Kumar, exceutive director at HDFC ERGO General Insurance, said, “The cars would be out on the streets only for half the number of days than before. This may bring down the risks of accidents and there is a case for premium revisions downwards.”
He added that the overall comprehensive motor insurance cover might see a reduction in premium, based on data received in the next few months.
Taking a third party motor insurance cover for risks of third party accidents is mandatory for all vehicle owners. Apart from this, covers for own damage that protect one’s own vehicle during accidents is also available and is optional. All insurers offer own damage and third party covers as a comprehensive cover.
Insurance companies have filed rates (submitted to the regulator) for each city for motor insurance as the risks of theft and accident are different in different regions. Other determinants of motor insurance premium include a vehicle’s model and age, engine capacity and manufacturer details. Insurers are also looking at risk-based pricing that will look into driver behaviour, average speed and number of kilometres clocked on an average by the vehicle. This model is yet to be formally implemented.
K G Krishnamoorthy Rao, MD & CEO of Future Generali India Insurance, said over a period of time, there is a case for premiums to be revised based on data received, if there is a decline in the number of accidents. However, he also did not rule out the possibility of overspeeding as there would be fewer vehicles on roads.
From an insurance perspective, companies view the move positively as overall risks are perceived to come down. Sanjay Datta, chief of underwriting and claims at ICICI Lombard General Insurance, said with car usage coming down, risks for vehicle owners and insurers would come down.
The Delhi government implemented the odd-even scheme on movement of vehicles from January 1 on a trial basis for 15 days as part of its efforts to reduce pollution in the national capital. Under the scheme, private cars having odd registration numbers can ply only in odd dates and those with even numbered registration plates can ply only on even dates.
A Supreme Court ban on registration of large diesel vehicles in Delhi-NCR region might also have an impact on insurance. Rao of Future Generali India Insurance explained that with fewer such vehicles on roads, spreads would reduce, leading to an increase in average premiums.
Estimates state that only 40-45 per cent of the vehicles plying on the roads in India have mandatory third party insurance. Insurers said that most people take covers while getting the registration of their new vehicles done but renewals rates were low.