Mumbai: Insurance Companies will soon offer analytics-based insurance for vehicle owners that includes ‘pay as you drive‘ Policies and covers where premium varies according to driving behavior. Companies have also been permitted to issue floater policies for multiple vehicles of the same owner.
“As a step towards facilitating technology-enabled covers, I’m sorry has allowed general insurance companies to introduce technology-enabled concepts for Motor Own Damage (OD) coverInsurance Regulatory and Development Authority of India (IRDA) said in a statement. According to the regulator, the advent of technology has created a constant momentum for the insurance fraternity to meet the interesting yet challenging demands of the millennium.
Jasleen Kohli, MD & CEO, Digit Insurance said, “This will encourage insurers to come up with new tech-enabled motor products and enhance competitiveness. We wholeheartedly welcome it. With the shift to open architecture and ‘file and use’ products for all distribution channels, competition will ensure better value for the customers.”
In addition to allowing companies to float ‘pay as you’ drive‘ and under the ‘Pay How You Drive’ policy, IRDA has allowed insurance companies to issue floater policies for same owner vehicles for two wheelers and private cars. A ‘pay as you drive’ cover is one where the premium is linked to the use of the vehicle and will benefit cities like Mumbai where many Vehicle Owners commute by public transport and use their vehicles only on weekends. The ‘Pay How You Drive’ policy collects the driving behavior of the insured and bills accordingly.
Before the pandemic, the insurance regulator had proposed allowing companies to use telematics for motor insurance. As per the draft proposal, a central repository of telematics data can be created where data from different sources will flow in a common pool. The data will be collected using the GPS of the vehicles. According to TA Ramalingam, Chief Technical Officer, Bajaj Allianz, Irdai’s circular on motor insurance add-ons is primarily a usage-based cover as an add-on to an OD policy that provides additional protection to customers for those Those who have low frequency of vehicle usage or also depending on the driving pattern of the insured.
“This means that for example, if you want to take a cover based on the number of kilometers driven by your vehicle, you can opt for this cover. With this circular, the insured can also buy an add-on motor cover on a floater basis for multiple vehicles, be it a four-wheeler or a two-wheeler, Ramalingam said. He said the purpose of such cover is to make motor insurance essentially more affordable, especially for customers who primarily opt for third-party covers only and overlook the benefits of OD covers.