To reduce costs, take advantage of the no-claim bonus, buy top-ups or shop a bit
In about a month’s time from now, purchasing general insurance 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 insurance segment especially, as insurers were used to accumulating their risks in a common insurance pool.
The premium rates are expected to jump by about 15-20 per cent for both motor and health covers. "It depends on the insurer and its pricing model and whether it would follow suit," says Amarnath Ananthanarayanan, managing director and chief executive, Bharti AXA General Insurance Company.
For example, if paying an annual premium of Rs 15,000 on your comprehensive health cover, you would have to shell out Rs 3,000 more (due to the expected 20 per cent hike).
|FENDING OFF HIGH PREMIUM|
Property, fire and marine insurance premiums are the ones that would take a direct hit. "Although motor and health premiums won't get directly impacted, their pricing would suffer indirectly. And, with the ever-increasing medical inflation, health premiums may go up 18-20 per cent, too," says Sanjay Data, head, customer service, ICICI Lombard.
Hence, the advice: Go for a health 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 insurance 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 health 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 health 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 health insurance plan," explains Suresh Sugathan, head, health administration team, Bajaj Allianz General Insurance.
Take advantage of the no-claim bonus (NCB) status on your insurance premium, too. This could provide you a discount on the premium for every claim-free year. Ensure you get the correct NCB 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 NCB.
More, even if you are buying a new car, you could transfer the NCB accrued to the new car's insurance 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.
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