INDIAN INSURERS PONDER NEW CATEGORY FOR THE NANO

Insurers in India are reported to be considering a new category of cover for the Nano, the “people’s car” that has been announced by Tata. Currently there are three categories of engine size for insurance pricing — under 1000cc, 1000cc to 1500cc, and above 1500 cc. However, the Nano, at 623cc, is considerably smaller than the smallest car currently on the market, the 800c Maruti. S. Narayanan, managing director of private sector insurer Iffco-Tokio, told local newspaper Business Line that “the Nano is a totally new concept and initially the premium charged will be based on guess, assumptions and expectations. But as time goes by there would be some corrections based on experience”. He noted that the Nano was still not available for inspection and that it had not yet been made clear how much spares would cost. In addition, he said that “another important factor which would be looked into will be the extent to which the car will be used. For example, when Maruti was first launched in the mid 1980s, the initial perception was that it was a city car, but what actually happened was that it was also extensively utilised for long distance travel”. The current lowest tier of motor cover costs a base price of Rp10,000 a year, but some reports have claimed that insurance for the Nano could be as low as Rp3,500 a year.