Even as diesel car owners prepare to pay a minimum of 3 Rupees more on every liter of diesel soon, here is the bummer of the week that could make the already pricey-to-buy diesel cars pricier. Insurance firms across India are said to be considering a higher insurance premium for diesel engined cars. Insurance premiums for diesel cars could be increased by up to 30% when compared to equivalent petrol cars which is quite steep a hike. So, the on road price of a diesel car could further increase even as the car buyers are already struggling with higher EMIs on the back of the increased interest rates.
Now, what exactly is prompting the insurance companies to go in for the premium hike for diesel cars? It is quite simple really. Diesel cars are usually bought by people who drive longer distances than petrol cars due to the higher fuel economy that diesel cars offer apart from the lower cost of diesel. Now, the more car is on the street, the more the chances of an accident, just as the classic adage of a ship being safer in the harbor than in open seas although harbors aren’t what ships are built for. So, the insurance companies will levy a higher premium on diesel cars due to the higher risks involved.
Meanwhile, here is word emanating from Vijay Kumar , head of motor insurance at Bajaj Allianz General Insurance about the possible insurance premium hike for diesel cars.
An individual travelling long distances mostly chooses a diesel vehicle, leading to higher exposure to risk, which may increase the premium. Fuel has become an important rating parameter with the growing preference for diesel vehicles.
Nilesh Garg , executive director, ICICI Lombard General Insurance, goes one step ahead to list out the different parameters an insurance company will now evaluate before calculating the insurance premium.
We have already factored in location, model and age of the vehicle. We are working on creating a database for the demographic behaviour and fuel type of the vehicle. Diesel cars are mostly used for commercial purposes and exposure to risk is higher.