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Get ready for higher medical, car insurance premiums

To reduce costs, take advantage of the no-claim bonus, buy top-ups or shop a bit

Yogini Joglekar & Tania Kishore Jaleel  |  Mumbai 

In about a month’s time from now, purchasing policies for health, motor and property could become more expensive, as the government has asked insurers to bear the risk of loss-making businesses on their books — else hike the premiums adequately. This would impact the car segment especially, as insurers were used to accumulating their risks in a common pool.

The premium rates are expected to jump by about 15-20 per cent for both motor and covers. "It depends on the insurer and its pricing model and whether it would follow suit," says Amarnath Ananthanarayanan, managing director and chief executive, Company.

For example, if paying an annual premium of Rs 15,000 on your comprehensive cover, you would have to shell out Rs 3,000 more (due to the expected 20 per cent hike).

  • Switch to a cheaper option, ‘shop around’ and compare 
  • For insurance, opt for a top-up instead of buying the entire policy. This turns out cheaper
  • Utilise your status
  • Opt for the voluntary deductible on your car policy

Property, fire and marine premiums are the ones that would take a direct hit. "Although motor and premiums won't get directly impacted, their pricing would suffer indirectly. And, with the ever-increasing medical inflation, premiums may go up 18-20 per cent, too," says Sanjay Data, head, customer service,

Hence, the advice: Go for a cover when young, as the risk to life then is the least. There are certain steps, however, that one can take to brace for the 'premium' eventuality. One, the policyholder can 'shop around'. Even if you had the same policy with the same company for the past few years, you may still want to make that strategic move by making the switch to another firm. Thanks to a plethora of price comparison websites, the exercise should be fairly simple: Feed your details and the websites will compare the prices for you.

So, at the time of policy renewal, you can shift to a cheaper one.

In case of insurance, one can go for a top-up instead of the entire policy. This turns out much cheaper. "If you are looking for a high sum insured, but cannot afford the premium, it may be a good idea to opt for a top-up cover. This can cover higher hospitalisation expenses. In comparison, your existing base cover (provided by the employer) or the insurer's policy may fall short. Also, buying a top-up cover is better, as the premiums are 30-40 per cent lower than those of an additional plan," explains Suresh Sugathan, head, administration team, Bajaj Allianz General

Take advantage of the (NCB) status on your premium, too. This could provide you a discount on the premium for every claim-free year. Ensure you get the correct on your car's renewal. So, it may be a good idea to forgo a small claim on your car in order to retain the accumulated

More, even if you are buying a new car, you could transfer the accrued to the new car's policy, provided you have sold the old vehicle. Confident drivers can also opt for a voluntary deductible on the premium in lieu of co-payment at the time of claim.

First Published: Tue, March 06 2012. 00:59 IST