In terms of motor insurance it is necessary to have third party cover as it protects against any damage caused to property or life. Here the liability of the insurer is unlimited and hence it turns out to be an unprofitable affair.
Insurance companies had been providing cover to commercial vehicles from a common declined pool of Rs. 400 crore which has completed two year and will help IRDA to understand the loss area and the kind of vehicles which are a part of this pool. As per the IRDA’s third party motor insurance tariffs, high risk vehicles will also be provided the cover.
As per various officials like- Madhukar Sinha from TATA AIG and Sanjat Datta from ICICI Lombard, the de-tariffed rates would change the concept of ‘one-size-fits-all’ premium as every insurer can decide on the rates by themselves depending on the underwritings.
G Srinivasan, Chairman and Managing Director of New India Assurance believes that de-tariff is the need of the industry but requires to get executed properly in order to avoid issues related to supply side.
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