The own damage (OD) section of luxury car segment is sure to get benefited even after the price rise in the claims of repairing or replacing costly parts, as calculated through the study of Insurance Dynamics of Luxury Cars by Insurance Information Bureau. The claim ratio acquired after full claim development is 57% only, as depicted by the study, where in 2010 India had the 12th largest high network population (HNP) which is seen escalating at 20.8% in comparison to China. As a result we are experiencing a high percentage of demand in the selling of luxury cars.

IIB was asked to act as the reference for car sector in 2009 by the Insurance Regulatory and Development Authority (IRDA). The insurance dynamics generated through the inspection of claims and policies collected during April to September 2011 was understood through this study for claim development till 31st October 2012.

In 2011-12, the study shows that the premium of luxury car was around Rs 80,000 in comparison to private car which has a premium of only Rs 7246. Hence, the cars with IDV greater than Rs 25lakh are considered as luxury cars not the premium sedans or hatchbacks.

In terms of OD claims frequency the stats show that non-luxury cars had 19% frequency with claim severity of Rs 18157 and luxury car has a frequency of 40% with severity of Rs 109890.

As per the study, out of all the claims 78% of the luxury car had the IDV lying between 25-50 lakhs and out of these 52% of cars were not even a year old. These had a contribution of about 46% in the claim frequency. The maximum number of claims where of cars having IDV band of Rs 1-1.5 crore. The major cities with these IDV band cars are Maharashtra, Delhi, Haryana and Tamil Nadu.

The OD claim ratio of luxury cars during April-September 2011 was 57%.

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