After seeing claims worth more than Rs. 1500 crore due to the Chennai floods, insurance companies to raise the premiums for motor insurance by 10-15%.
"We will have to build in the factor of flood for all big cities that are developing fast and premium should go up by 10%-15%,"—Vijay Kumar, head of motor insurance Bajaj Allianz General Insurance.
Chennai floods have seen record claims as much as double of what insurers faced during the Mumbai floods in 2006 and exceeded the claims at the time of Jammu & Kashmir and Uttrakhand floods. Insurance companies claim that the risk of insuring cars in metros likes Mumbai, Delhi, Chennai and Kolkata is much higher. Due to this, policy rates in flood related clauses are expected to be revised both in motor and property insurance.
Chennai experience has brought forward the immensity of claims in metro cities. Motor claims worth Rs. 30 to 50 crore have been paid by most of the motor insurance companies due to the floods.
"After the Chennai experience, we know that severity of claims is higher in metros, so there will be an increase in premium," stated SS Gopalaratnam (MD and CEO of Cholamandalam MS).