Good news for car owners cheaper IRDAI insurance coverage based on car usage details Inside

Good News For Car Owners: Cheaper Insurance Cover Based on Usage. Deets Inside

New Delhi: Vehicle owners can now purchase cheaper insurance policies based on their driving habits, general vehicle maintenance, mileage and usage pattern. This comes after the Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurers to introduce concepts such as Pay as You Drive, Pay How You Drive and Floater policies for the same person’s vehicles in auto damage policies as add-ons.Also read – Cars, motorcycles will become more expensive from June 1. Check how much you will pay more from next month

According to a report in the Indian Express, the purpose of such coverages is to make auto insurance more affordable, especially for those customers who primarily opt for third-party only coverages and overlook the benefits of OD coverages. This also gives drivers with lower mileage more transparency and control over their car insurance. “Such initiatives are a push in the right direction to increase much-needed auto insurance penetration in India,” the publication was quoted as saying TA Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance. Also Read – LIC has over Rs 21,500 Crore unclaimed funds. How can you check your amount?

Cheaper insurance coverage you need to know

  • In case of ‘pay while you drivesince the policy is valid for a certain number of miles, the premium will be lower than the standard plans for those who don’t use their vehicle very often.
  • If a customer wants insurance based on the number of kilometers he/she drives with his vehicle, he/she can opt for this cover.
  • A person who owns more than one vehicle may also extra bonnet on a float basis. The ‘floater policy’ will enable vehicle owners to obtain 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 require telematics, a mix of telecommunications and computing used to track driving-related data, including storage and transfer of information.

It should be noted that AI and Data Analytics will play an important role in this and will help insurers track trends that drive product innovation. In addition, the new move will encourage people to take care of their vehicles, follow traffic rules and maintain good driving habits. Also Read – Covid-19: IRDAI asks hospitals not to discriminate between cash, cashless insurance policies

Currently, there is unified price parity for auto insurance due to the lack of user behavior-based pricing of insurance premiums. The new concepts will make it cost-effective for low-consumption customers, especially those who drive less than 10,000 km per year, and for those who drive safer and more efficiently.

According to the data from the General Insurance Council, insurance companies mobilized a total premium of Rs 70,432 crore, an increase of 3.98 percent, in the motor vehicle category during the year ending March 2022.

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