Pay Insurance Premium Based On Your Driving Behaviour! This Is How New Insurance Policy May Work..
A motor insurance policy that charges you a premium based on your driving behavior is now available.
General insurance companies have now launched insurance covers such as ‘Pay as You Drive’ and ‘Pay How You Drive.’
Read on to find out all the details about this new insurance!
Insurance Based On The Way You Drive
The Insurance Regulatory and Development Authority of India (IRDAI) has now approved general insurance companies to introduce telematics-based motor insurance covers.
These are the policies that charge you a premium based on the quantity and quality of your driving.
For two-wheelers and private cars with the same individual owner, insurers are also allowed to start floater insurance.
By removing the need to maintain separate car policies and keep track of their renewals, experts claim that the option to cover numerous vehicles under a single insurance will significantly increase the convenience factor.
Coverage Will Be Available As Add-on
The coverage will be available as an add-on to the standard Own Damage policy, which pays for costs associated with damage to the vehicle.
As per Udayan Joshi, President – Underwriting & Reinsurance, Liberty General Insurance, “It is a welcome move by the regulator, especially at a time when the pandemic has changed the way we work and travel, these add-on covers will definitely appeal to the customers who are working from home more often, thus making car insurance cost effective for them.
Under IRDAI’s Sandbox programme, which is a framework set up by a regulator that allows insurers to perform experiments in a controlled setting under regulatory oversight, insurers are currently introducing telematics-based auto insurance plans.
For instance, SWITCH, an on-demand comprehensive motor insurance policy, was just introduced by Edelweiss General Insurance (EGI). Customers will find it helpful since the app detects motion and instantly activates insurance when the vehicle is driven. Additionally, it recognises good driving by policyholders by measuring both quantity and quality of driving and adjusting premiums accordingly.
There is a possibility that customers will gain from and have better control over insurance costs with the new IRDAI rules. However, there also might be the possiblitiy that this development will be a blow to high usage customers as they will no longer be able to be cross subsidized.