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Friday, July 10, 2009

Vehicle dealers not last stop for auto insurance

A Mumbai resident who recently bought a midsized car was stumped when the dealer demanded Rs 48,000 premium for the annual comprehensive car insurance. “I did some online research independently and got several quotes from insurance companies, one of which was as low as Rs 25,000. I went back to my dealer who then matched it.’’
In other words, if you plan to buy a car, you don’t have to necessarily pick up motor insurance from the dealer. You could approach insurance companies directly and negotiate a lower premium and secure up to 50% discount on what your dealer offers. According to Delhi-based consumer expert Bejon Misra and former General Insurance Council secretary general K N Bhandari, dealers are known to mark up premium.
While insurance companies TOI spoke to deny knowledge of such a practice, Bhandari says, “Higher the premium, higher the commission. There is a need for consumers to assert themselves even to the regulator to enforce greater surveillance and more stringent implementation of insurance guidelines.’’
Another Mumbai resident who just bought an SUV says, “When people take an LPG connection, they think it is compulsory to pick up a gas stove from the dealer. The same mindset works here.’’ He too managed to bring down the dealer’s quote from Rs 38,000 to Rs 14,000. “The range of quotes is shocking,’’ he says.
Importantly, the dealer did not mention that he was entitled to a no-claims bonus as well, considering he had not made a single insurance claim on his old car. The bonus is transferable across insurers and vehicles-provided you sell your old vehicle.
Says Rahul Aggarwal, CEO at Optima Insurance Brokers, “The bonus is on percentage basis and not in rupee terms. It changes every year. The minimum is 20% on own-damage premium and maximum, 50%.’’ The percentage remains unchanged even when one upgrades from a smaller vehicle to a large one, assures Aggarwal.
An official at the Insurance Regulatory and Development Authority (IRDA), while asking consumers to be more aware, says, “Dealers are neither agents, brokers nor insurers. What they quote is what they get from insurers. They can’t quote more or less than that.’’ Consumers should cross-check the price offered by various insurers, says the official. “Nobody should get carried away. No dealer can force you to get insurance.’’

source: ET

My Comments - You can have it done through Direct Agent/Broker but the ultimate decision is yours. Choose them by the range of service they offer not by the discount they offer.

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