Vehicle owners will now have the option to buy insurance policies based on driving behaviour as the Insurance Regulatory and Development Authority of India (IRDAI) has allowed general insurance companies to offer tech-enabled concepts of “pay as you drive” and “pay how you drive” for “own damage (OD) cover” based on certain parameters.
Apart from these, one can also opt for floater policy just like health policies which is meant for those who have more than one vehicle as add-ons in a motor insurance policy. “The Concept of Motor Insurance is constantly evolving. The advent of technology has created a relentless pace for the insurance fraternity to rise up to interesting yet challenging demands of the millennials. The general insurance sector needs to keep pace with and adapt to the changing needs of the policyholders,” said IRDA in the notification.
The online policies will offer the much-needed fillip to Motor OD Insurance in the country and increase its penetration.
What are three types of insurance covers?
Pay as You Drive: Under this model, users can pay for the insurance as per their usage. It means that the customer has to declare approximate planned usage which can be tracked using an app with geo-tagging. Meanwhile, the insurance company also needs to clarify the process of settling a claim in case the customer exceeds the declared usage
Pay How You Drive: This add-on facility means the insurance depends on how you drive your car. In this case, customers will have the option to choose live-tracking of their driving in terms of speed and usage etc. The insurance company will offer a pricing based on these parameters.
Floater policy for vehicles belonging to the same individual owner for two-wheelers and private cars: If a customer owns more than one vehicle – two-wheeler and four-wheeler, such a person can opt for this cover for all the vehicles.