Motor insurance has always been shaped by risk. Traditionally, your vehicle type, driving history, location, and age determined how much you pay. But there is a new factor now gaining attention: climate change. As floods, storms, and unpredictable weather events become more frequent and severe, insurers are revisiting how they calculate risk—and premiums.

If you have been wondering why your renewal premium is slightly higher despite no claims, the answer might lie in something far beyond your driving record. It could be your geographical exposure to environmental hazards that insurers now factor into pricing.

So, how exactly is climate change influencing motor insurance in India? And more importantly, how can you protect your vehicle in these uncertain times?

The Rise in Claims Due to Extreme Weather Events

Over the past few years, India has seen a surge in natural disasters. From flash floods in urban cities like Mumbai and Chennai to cyclones and landslides in coastal and hilly regions, these events have not only caused damage to infrastructure but also led to a significant increase in vehicle damage claims.

Waterlogged engines, submerged cars, dented roofs from hailstorms, and trees falling onto parked vehicles are no longer rare occurrences. According to industry data, insurers reported a sharp spike in motor claims after major events like Cyclone Tauktae and urban flooding incidents across states.

As the volume and severity of claims go up, insurance companies are left with no option but to increase the cost of coverage. After all, insurance is a business of managing risk, and climate events are now seen as a consistent and growing threat.

Why Insurers Are Adjusting Premiums Based on Environmental Risk

Earlier, insurers mostly relied on your driving profile and past claims history. But with climate models predicting more erratic weather patterns, underwriters are now adding environmental risk to the equation.

Areas prone to waterlogging, flooding, or cyclones are being marked as high-risk zones. Vehicles registered in such locations might see higher premiums or require additional add-ons to ensure full protection.

This shift is not just happening in India. Globally, insurers are exploring tools like climate risk mapping and AI-based weather forecasting to better understand location-based threats. These tools help them price policies more accurately and reduce exposure to large-scale losses.

If you live in a city that frequently experiences heavy monsoons or unseasonal storms, it is worth checking whether your premium reflects this new climate-based risk model.

How to Protect Your Vehicle in an Unpredictable Climate

With the weather no longer playing by the rules, having the right kind of motor insurance coverage is more important than ever. Here are a few steps you can take to stay protected:

1. Opt for Comprehensive Coverage

While third-party insurance is mandatory by law, it only covers damage caused to others. Comprehensive insurance, on the other hand, covers your own vehicle against natural calamities like floods, earthquakes, and landslides. If climate risks are growing in your area, this is not just an option—it is a necessity.

2. Choose the Right Add-Ons

In unpredictable weather, add-on covers can make a world of difference.

Engine Protection Cover: Particularly useful during floods, as water entering the engine can lead to expensive repairs which standard policies may not cover.
Zero Depreciation Cover: Ensures full claim settlement without factoring in the depreciation of parts, which is beneficial in case of severe damage.
Return to Invoice Cover: Offers full reimbursement of the vehicle’s invoice value in case of total loss, which can be crucial after a major disaster.

Each of these add-ons can strengthen your coverage significantly and offer peace of mind in stormy seasons.

3. Evaluate Your Risk Zone

Insurance premiums may now be influenced by the location of your residence or parking. If your home or office is in a low-lying area or near a coastal belt, you may be at higher risk. Some insurers offer telematics or app-based suggestions on weather alerts. Staying informed can help you plan better.

4. Stay Updated and Review Annually

Given how quickly the climate is changing, it is wise to review your policy annually. Look out for changes in premium, added features, or exclusions. You can also compare plans and switch to another provider offering better protection against environmental risks.

When comparing policies, take time to explore the best motor insurance options that include climate-specific protection. Check it out: https://www.universalsompo.com/motor-insurance

The Bigger Picture

While climate change might feel like a global issue, its effects are now visible in our daily lives—including the cost of insuring our vehicles. The road ahead may be uncertain, but with smart choices and the right coverage, you can stay protected from both financial and physical damage.

Insurers are adapting to the new climate reality. As policyholders, we must do the same. Comprehensive coverage, thoughtful add-ons, and awareness of your regional risks can help you stay ahead of the storm.

In the end, insurance is not just about complying with the law. It is about safeguarding what matters most to you. In this evolving world, choosing the best motor insurance is no longer a luxury—it is a necessity shaped by the climate we live in.

How Climate Change Is Affecting Your Motor Insurance Premiums