IRDAI allows general insurance companies to offer more auto insurance solutions

7 Jul 2022 , 09:10 AM

The Insurance Regulatory and Development Authority of India (IRDAI) has made the decision to let general insurance firms provide additional, supplemental coverage in addition to the damage component of motor policies. For an extra premium, you may add these optional covers to your standard insurance.

IRDAI stated that its goal was to help the country’s motor vehicle damage penetration go deeper. “The emergence of technology has accelerated the insurance industry’s effort to meet the compelling yet demanding aspirations of millennials. The general insurance industry must adapt to the policyholders’ shifting requirements and stay up with them “In a circular, the insurance regulator stated.

“The introduction of the aforementioned possibilities will help give motor vehicle damage insurance in the nation the much-needed boost and expand its penetration.”

Pay-as-you-drive, Pay-how-you-drive, and single floater policies for a retail policyholder’s several two-wheelers or autos are the add-on plans now allowed. For instance, the own damage premium is now correlated with the age, make, and model of the car.

However, if you choose “Pay-as-you-drive,” your rates may be based on the number of miles or time the car has been used. “The regulator made a wise decision, especially now that the epidemic has altered the way we work and travel. 

Customers who work from home more frequently will be interested in these add-on coverage options, making their automobile insurance more affordable “said Udayan Joshi, Liberty General Insurance’s president of underwriting and reinsurance.

Car owners who don’t drive much will profit because their rates are now based on their vehicle’s age, make, and model. According to Ashwini Dubey, Head, Motor Insurance Renewals, Policybazaar.com, “With the new IRDAI standards, clients will profit and will have control over the upfront insurance cost since the premium would be dependent on the kilometers traveled by the vehicle.” Additionally, it will improve how insurers evaluate the risks.

A person who drives their automobile more regularly is more exposed to the danger of an accident and has a larger possibility of filing an insurance claim than a person who drives less frequently, he said.