Vehicle owners can now buy cheaper insurance policies based on their driving behavior, general upkeep of vehicle, milage and usage pattern. This comes after the Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurers to introduce concepts like Pay as You Drive, Pay How You Drive and Floater policies for vehicles belonging to the same individual in motor own damage policies as add-ons.
According to a report in the Indian Express, the objective of such covers is to make motor insurance more affordable, especially for those customers who primarily opt for only third-party covers and overlook the benefits of OD covers. This will also give lower-mileage drivers more transparency and control over their auto insurance. “Such initiatives are a push in the right direction in increasing the much-needed penetration of motor insurance in India,” the publication quoted T A Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance as saying.
Cheaper insurance cover that you should know
- In the case of ‘pay as you drive’, as the policy is valid for a specified number of kilometres, the premium will be lower than standard plans for those who use their vehicles infrequently.If a customer wants an insurance cover based on the number of kilometres he/ she drives his vehicle, then he/ she can opt for this cover.
- A person who owns more than one vehicle can also purchase an add-on motor cover on a floater basis. The ‘floater policy’ will allow the vehicle owners to get a single policy for multiple vehicles including two-wheelers.
- In the ‘pay how you drive’ concept, the insurance premium depends on the way the person drives his/ her vehicle the premium is lower if he/ she uses the vehicle in a better, more efficient and safer way.
- These products will need telematics, a mix of telecommunications and informatics which is used to keep track of driving-related data, including storage and transfer of information.
