Like many other things, car insurance premiums have also increased in India over the years. This is about to change as insurance companies will soon start offering scan-based insurance where there will be a ‘pay as you drive’ option. The premium for car insurance will also depend on driving behavior. Insurance regulator IRDAI announced the new policies and mentioned that they would be implemented with immediate effect. With this new policy, the car owner can decide how much he wants to pay for vehicle insurance. The regulator has also allowed insurance companies to issue floating policies for multiple vehicles belonging to the same owner.
The statement released by IRDAI said: “The concept of motor insurance is constantly evolving. The advent of technology has created a relentless pace for the insurance fraternity to meet the interesting yet challenging demands of millennials. The P&C insurance industry must keep pace and adapt to the changing needs of policyholders. In order to facilitate technological covers, Irdai has enabled general insurance companies to introduce technological concepts for automobile damage (OD) cover.
The Insurance Regulatory and Development Authority of India (IRDAI) has approved the new insurance policies for insurance companies. According to the new auto insurance rule, one can set the premium of the vehicle he uses according to the distance traveled, the route of the vehicle or on a regular basis. This would help people who don’t often take their vehicle out on the road. The owner can also set the maximum distance traveled by a vehicle in a month and decide the premium based on that. Customers will have better control over the initial cost of insurance. For example, Customer A drives 100-200 km per month and Customer B drives more than 1000 km per month. Both do not have to pay the same amount as the insurance premium under the new policy.
Along with this, the driving behavior of a car owner will also decide the premium. bad driving or reckless driving will have a direct impact on the insurance premium. It will be higher than that of a car that drives normally on the road. it is said that a vehicle’s driving behavior will be monitored by GPS. It is said that a small device or application would be installed in the car or mobile phone which would share data related to driving style. With the help of the same devices, insurance companies can also track the driving habits of a particular vehicle. After analyzing the model and driving style, the insurance companies will give scores and these scores will decide the insurance premium. Higher score, lower bounty.
Along with this policy, a person can also opt for floating policies. If a person owns more than one vehicle, whether a four-wheeler or a two-wheeler. All of these vehicles would be covered by this single policy. The owner does not have to opt for individual policies for each vehicle. This new announcement from the authorities should make insurance policies much more affordable for homeowners.