The 'Loss Business' Paradox
Strategy•Jan 05, 2026
In the insurance world, there is a fine line between a smart claim and a financial disaster. We recently handled a case for a Tata Harrier that illustrates this perfectly.
The Entry Fee: Compulsory Deductible
Most people forget the "Entry Fee." For SUVs over 1500cc, the IRDAI mandates a Compulsory Deductible of ₹2,000. If you have a ₹5,000 scratch, you pay ₹2,000 upfront. You are doing all that paperwork just to get ₹3,000 back.
The "Small Claim" Math:
- ❌ ₹2,000 Out-of-pocket (Deductible)
- ❌ ₹3,555 Lost NCB (No Claim Bonus)
- ❌ ₹10,000 High-Risk Renewal Loading
- Total Outflow: ₹15,555 (to get back ₹3,000)
The Renewal Shock
A policy with a claim history is priced differently. For this Harrier, a clean renewal was ₹31,000. With one small claim? It surged to ₹41,000. The insurer flags you as "High Risk."
The Golden Rule
Insurance is for catastrophes, not maintenance. If the damage is under ₹15,000, pay cash. It hurts today, but it saves your history and your future wallet.