Car Insurance

covers your car against risks like theft, accident, explosion etc.

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Car Insurance for Risky Drivers

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In India, when is a driver considered risky by car insurance companies? Ideally, a rash driver who has numerous tickets or challans for violation of traffic rules should be considered a rash driver for the purposes of car insurance. After all, a driver who violates traffic rules is more likely to end up filing insurance claims. However, car insurers are unable to adopt such a holistic approach due to many reasons ranging from lack of computerization and free exchange of data between RTO, Traffic Police and car insurance companies to lack of awareness about road safety rules. Simply put, car insurance companies consider those drivers who file frequent claims to be risky drivers.

As on date, the fact that you are booked regularly for talking on the cell phone when driving or for jumping the red light does not affect your car insurance cover. However, it is just a matter of time before car insurance companies incorporate the necessary changes to their definition of a risky driver.

Factors That Make You a Risky Driver

The following factors will probably be considered when determining car insurance cover for risky drivers:

a.Frequent insurance claims for own or third party damage.

b.Consistent high value Claim every year for the past 2-3 years.

c.Involved in chargeable offences related to driving like driving under influence or being involved in an Accident leading to major injury or death of any party involved.

d.Vehicle found in a damaged condition during insurance cover renewal. This may result in increase in Premium charged on the car insurance policy.

e.Presence of false information in the proposal. Repeat offenders may be automatically treated as a risky driver.

f.Correlation between accident statistics and following characteristics of the party at fault:

b.Marital status
c.Area of residence
d.Regularity of usage of the vehicle. A person using the car to commute to work will drive more and will face higher Risk of meeting with an accident.
e.Type of vehicle. Sports cars and SUVs vs Family sedans.

Car insurance companies in India have analyzed insurance claims data and accident stats to determine that middle aged married women are least likely to be involved in accidents or instances of rash driving. They offer special discounts to such drivers. Teenaged drivers are frequently involved in accidents. Such drivers are automatically charged a higher premium for being risky drivers.

However, it is advisable for car owners to analyze these factors and avoid the tag of being a risky driver.

Effect on Insurance Premium

The cost of the insurance cover will rise. If you have filed insurance claims to repair damage to own vehicle in the past, then the cost of own damage component of the car insurance Policy will rise. This will push your premium higher. If you have been involved in car accidents, then the cost of 3rd party cover may also rise. The rate of increase will depend on the nature of the claim and the car in question. It may vary from 10% to 50%.

Loss of No Claim Bonus will be unavoidable. The car insurance company will levy a malus (Latin word meaning ‘fine/penalty’). This will result in a double increase in the premium. The loss of bonus will boost the premium and the malus will push it further.

The Insurer retains the right to refuse the car insurance policy Proposal of a risky driver. This is not commonly done but repeat offenders involved in major accidents may find themselves uninsurable.

Getting rid of the tag of a risky driver will require patient efforts stretching over 2-3 years. Use the internet to compare as many car insurance policy quotes as possible to ensure you minimize the increase in cost of the policy.