Consumers get freedom to choose auto insurance company

The Insurance Regulatory and Development Authority India (IRDAI) has allowed all general insurance companies to sell their vehicle insurance policy to consumers across all auto dealership networks without tying up. They insurance companies have been given freedom to set differential pricing as well as decide higher dealer commission.

This move will allow consumers to have a wider selection of insurance companies to choose from and compare premiums. While it will create a competition among the insurers to offer competitive premiums, it will give freedom to the consumer whose choice was earlier limited to the company which had exclusive tie-up with the dealer.

The IRDAI circular released on August 31, 2017, recognised the important role played by auto dealer network in distributing and renewing vehicle insurance policies. The announcement also allowed for insurance companies to pay higher commission to the dealer for their services.

Vehicle dealers adhering to the guidelines can look to increase profits by selling policies to their customers as well as consumers who have bought vehicle from other dealers as well.