Comprehensive car insurance is the most preferred option
Comprehensive car insurance has become the most preferred insurance option, with 97% of buyers opting for the same in Q1FY23.
According to data from the General Insurance Council, the total premium underwritten has increased year on year over the past two years. Especially with the first quarters of FY21 and FY22 being ravaged by Covid-19, there is an increase in overall underwritten premium by over 30% in FY23 vis-à-vis FY22. This reflects both in ‘own damage’ and ‘third-party’ underwritten premium.
For newer cars (0-7 years), comprehensive car insurance is the preferred option for a majority of customers as they look for end-to-end protection for their vehicles, but for older vehicles (10-15 years), the third-party insurance selection rate goes as high as 50%. This is also reflected in the add-on preference in the lower car age segment.
Ashwini Dubey, head, of Motor Insurance Renewals, Policybazaar.com, told FE that the third-party insurance selection rate goes higher as the car gets older. “Majority of customers tend to purchase third-party insurance as the car gets older in order to save money. Also, as many times the older car is a second car with limited usage, customers seem to prefer opting for third-party insurance in order to save money,” he said. “For such customers, floater plans and pay-as-you-drive plans would be extremely beneficial as they would provide added coverage of own damage/theft protection at a minimal cost.”
‘Zero depreciation cover’ remains the most popular add-on, followed by ‘engine protector cover’ and ‘roadside assistance, ‘consumables’ and ‘return to invoice’ cover. For brand new vehicles, the ‘zero depreciation cover’ selection is above 90%, according to the data. “Most customers opt for multiple add-ons including zero depreciation, engine protection cover, return to invoice cover, consumables, etc, at the time of buying the policy,” Dubey said.
The data shows that more than 50% of customers opt for ‘zero depreciation cover’ till the car is three years old, and it remains the most selected option until the car is five years old. ‘Roadside assistance’ add-on remains popular beyond that, till the car is seven years old.
Customers living in metro cities (Delhi, Mumbai, Pune, Kolkata, Chennai, Bengaluru, Hyderabad, and Ahmedabad) tend to opt for a comprehensive plan over a third-party plan even for a car aged above 10 years. Add-on selection is also higher in metro cities and continues up to a higher car age.
Source : Financial Express