Those who have made several insurance claims, especially of small amounts, for vehicle damage should think twice before filing the next claim as insurance companies are becoming increasingly cautious in extending the insurance facility to such customers.
“Non-life insurers have become conscious to make all their business profitable. In an attempt to do that, they have gone slow in issuing policies to people who are frequent in filing claims and who have vehicles more than 10 years old (for which claims are typically more),” says Rahul Aggarwal, chief executive, Optima Insurance Brokers Pvt. Ltd.
Premiums from motor vehicle insurance constitute about half of the total premium revenue for general insurers in India. But, “for every Rs100 collected as premium, Rs130 is paid as claims by commercial vehicles. The claim ratio for private vehicles is a little lesser than commercial vehicles,” says, S.K. Sethi, vice-president of the Insurance Brokers Association of India.
“All companies try to balance their claims and premiums. More than two claims by a person suggest he is a careless driver,” says T.A. Ramalingam, head of underwriting at Bajaj Allianz General Insurance Co. Ltd. But, he says, the premiums are less for vehicles that are considered safer. “For good model cars such as BMW, we have reduced the premium cost from 3% to 2% of the declared car value.” Insurance experts say frequent filing of claims is not beneficial for the vehicle owner as well because it substantially increases premium rates. Policyholders are denied no-claim bonus and discounts when they renew the policy if they had filed a claim the previous year. The no-claim bonus can be as high as 50% of the premium amount.
“Consumers should not file small amount claims because it deprives them of no-claim bonus and they are charged extra premium when they renew their policy,” says Sethi. For insurance companies, besides the claim amount, expenses, such as those on surveyors, increase the cost of servicing the policy.
A back-of-the-envelope calculation shows that if a customer has not filed any claim of less than Rs10,000 the year before, he needs to pay only Rs9,757 the next year as premium for a four-year-old Toyota Corolla after discounts, no-claim bonuses and an undertaking that he would not file any claim for small amounts. Otherwise, it would cost Rs34,830.
No I-T returns at post offices
There is no facility to file income-tax returns at post offices now, a tax official has clarified. A 7 July report on this page had said income-tax returns could be filed at post offices.
Shishir Jha, a spokesman for the Central Board of Direct Taxes, said the facility to file returns through post offices was a one-time measure in 2006, when some employee unions had given a strike call for the last two days of tax filing. “There is no such arrangement now,” he said.
However, as reported on 7 July, returns can be filed at I-T offices anywhere in the country as the process is now centralized. They can also be filed through the Internet. Staff Writer