Changing Trends in Commercial Vehicles Insurance in India
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Case Code: INS005 Case Length: 03 Pages Period: 2003 Pub Date: 2003 Teaching Note: Available |
Price: Rs.100 Organization: Varied Industry: Insurance Countries: India Themes: - |
Abstract Case Intro
Swami Dorai, the owner of a transport company was giving instructions to one of his truck drivers in the wake of new guidelines for insuring commercial vehicles.
"Drive carefully, complete this trip without any major repairs," he said. His truck driver asked him the reason for the emphasis on repairs. "Following a burgeoning loss ratio, the state-run general insurance companies are no longer going to provide comprehensive insurance cover to commercial vehicles (CVs) over seven years old," replied Dorai.
Insurance companies issued a circular directing branch and divisional offices to stop accepting comprehensive insurance policies for vehicles over seven years old from 2002. According to the circular, commercial vehicles over seven years old will be insured only for third-party liability. Comprehensive insurance policy covers third-party liability as well as damages suffered to vehicles. The insurance cost for motor vehicles was perceived to be too high. Dorai went to meet Krishna Reddy, the divisional manager of National Insurance Company which had insured all his vehicles, to talk about the issue...
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