Owners of Sports Utility Vehicles (SUVs) such as Scorpio, Qualis, Sumo, Innova are an unhappy lot these days.
With tariffs in a free-market era, non-life insurance companies have reduced motor insurance premium rates by 30 to 40 per cent (of earlier rates) for other private cars, but SUV premium rates are down only 15 to 20 per cent, because this segment is causing higher losses.
For every Rs 100 collected as premium for SUVs, the claim outgo is Rs 120, possibly because these vehicles come in for rougher use.
According to insurers, even though SUVs are individually owned and registered as private cars, they are mostly used as cabs, suffer more thefts and are also used in political rallies. Their maintenance is less while carrying higher risk.
“There is a strong correlation between the theft of SUVs and election time. Maruti has anti-theft devices in all its models therefore the theft is lower. We hope that the other manufacturers will follow the example,” said Eswaranatarjan N, motor head of ICICI Lombard General Insurance.
Insurers consider a vehicle’s make, model, engine capacity, place of registration, and claim experience to arrive at a premium and decide on discounts. “Vehicles for commercial usage have a higher premium. To a great extent, most SUVs are used as cabs and in political rallies so the discounts are low,” said a senior official at state-owned National Insurance Company.
“Globally, SUVs are considered high risk cars and have higher premium than non-SUVs,” said Yashish Dahiya, CEO of Policybazar.com.