Why aren’t car policy premiums supposed to be uniform across insurers?
IRDAI prescribes the minimum rates of premium to be charged on the sum insured
Why aren’t car policy premiums supposed to be uniform across insurers?
Deepak Mishra, Bhopal
The motor insurance premiums are governed by the Insurance Regulatory and Development Authority of India (IRDAI), which prescribes the minimum rates of premium to be charged on the sum insured. To that extent, premiums should be the same across insurers, but the regulator also lets insurers offer certain optional covers and discounts, and it’s mostly on account of these that the premiums vary; each insurer offers a combination of optional covers, their pricing, and discounts unique to it. Other reasons why premiums vary among insurers are the insurers’ estimate of sum insured, consideration of no-claim bonus, and proposal of ‘voluntary excess’ and more such features that are offered in a policy, which helps insurers differentiate their products compared to competition.