Insurers consider increasing insurance premium on luxury vehicles

General insurers in India are considering raising premium charged on luxury vehicles as they think claims raised from this segment have exceeded the auto industry average and costs to repair these high-end vehicles are high.

The increasing number of claims has made the business of insuring luxury cars a loss-making. The ratio of claims to premium paid in this segment doubled from a year earlier to 80 % in the FY 2012- 2013, said an industry insider.

Mr. S.S. Gopalaratnam, MD & CEO of Cholamandalam MS General Insurance blames rising sales of luxury cars and the changing profile of buyers for rising claims.

“Earlier, these high-end vehicles were chauffeur-driven and now it is being driven by owners themselves. Chauffeurs are experienced people and they have a duty to perform", said Mr. Vijay Kumar, Head (Motor Insurance), Bajaj Allianz General Insurance, adding, “Vehicles with owner-drivers are leading to a higher number of accidents. We have seen claims in high-end segment double in the last one year."

There is a need for the premium to increase by 20-30 percent because of the high cost involved, he added. 

Source: http://www.insuringindia.com