Luxury or expensive car is considered a status symbol. What immediately sets these high-end cars apart from the other lower-segment cars is their well-crafted exteriors and interiors. There are an increasing number of luxury cars like BMW, Jaguar, Mercedes, Porsche etc hitting the Indian roads every day. These car owners pay high premiums on car insurance as damage or loss to a small part can also cost a small fortune.
Take for instance the cost of a car logo on a BMW or a Mercedes. The logos on such cars are priced over Rs. 25,000 and for some models it can cost more than a lakh. Theft of car logos is on an upward trend and insurance companies receive a number of claims from such car owners as these logos are insured under the comprehensive motor insurance policies.
Car insurance claims are paid after taking the depreciation into account. There are some companies which offer innovative add-on covers like a zero depreciation cover. Tata AIG General Insurance was one of the first companies to launch such a unique cover. Bajaj Allianz General Insurance, Royal Sundaram, Chola MS also offer zero depreciation cover which is gaining popularity among new car owners. The reason for this is that such add-on covers are available only on new or fairly new cars that are not more than 3 years old. The insurance premium on such covers is higher and interests owners of mid-segment to top-segment luxury cars.
Other parts which easily get damaged, especially in the metros, are the side-view mirrors, head lights, tail lights etc. K G Krishnamoorthy Rao, CEO, Future Generali General Insurance said that side view mirrors mostly come in pairs. Therefore, even if one mirror is broken, you have to replace both, driving up the repairs or replacement cost.
Car insurance companies are now looking to charge premiums after profiling a car owner. I western countries, this concept has been in practice for quite some time now. Red colour car owners are seen as a more aggressive driver and considered more prone to accidents.
Hemant Kaul, CEO & Managing Director of Bajaj Allianz General Insurance Company said, "The thinking in our company is the risk of accident comes out of the nature of the car and also the driver. Certain cars are seen as more risky than others. For example, red cars are typically driven by people between 18 and 24. So, the premium could be higher, as the accident rate is higher in this age group."