Good News For Car Owners cheaper IRDAI Insurance Cover Based on car Usage Details Inside

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New Delhi: 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.Also Read – Cars, Motorcycles Set To Become Expensive From June 1. Check How Much You Will Pay More From Next Month 

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. Also Read – LIC Has More Than Rs 21,500 Crore Unclaimed Funds. How Can You Check Your Amount?

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.

It is to note that AI and Data Analytics will play a major role in this and help insurers track trends augmenting product innovation. Additionally, the new move will encourage people to take care of their vehicles, follow traffic rules and maintain good driving behaviour. Also Read – Covid-19: IRDAI Asks Hospitals To Not Discriminate Between Cash, Cashless Insurance Policies

Currently, there is uniform price equity for motor cover due to lack of user behaviour-based pricing of insurance premium. The new concepts will make it cost-effective for low-usage customers, especially those who drive less than 10,000 km a year, as well as those who drive more safely and efficiently.

According to the General Insurance Council data, Insurance companies mobilised a total premium of Rs 70,432 crore, an increase of 3.98 per cent, in the motor vehicles category during the year ended March 2022.

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