8 Jul 2022 , 01:26 PM
The Insurance Regulatory and Development Authority of India (Irdai) has allowed general insurance companies to introduce ideas like “pay as you drive,” “pay how you drive,” and floater policies for vehicles belonging to the same individual owner of two-wheelers and private cars as add-ons in motor own damage (OD) policies. This is done to facilitate technology-enabled insurance covers.
The motor OD policy can be customized with these add-ons to provide the best features based on customer driving habits, vehicle usage, and other factors. These are anticipated to give insurers improved rating criteria, allowing them to distinguish between excellent and bad drivers and affecting premiums appropriately.
Previously there was no way to separate different types of drivers, but now it is possible, and customers who actually merit a bigger discount will be appropriately rewarded. Given that third-party (TP) liability coverage is required and that most people choose it, this is also anticipated to lower the cost of OD coverage.
Pay as you go insurance derives from the notion that policyholders will be assessed rates according to vehicle usage. Pay how you drive, which is based on the idea of customers paying premiums based on their driving standards, is similar.
Additionally, floater insurance is designed to lessen the difficulty for vehicle owners by allowing them to purchase a single policy to cover all of their vehicles rather than having to purchase separate policies for each one.
The insurance regulator claims that the idea of auto insurance is continually changing. The emergence of technology has accelerated the insurance industry’s effort to meet the compelling but demanding aspirations of millennials. The general insurance market has to evolve along with policyholders’ evolving needs. The introduction of such add-on alternatives would help provide motor OD insurance in the nation the much-needed boost and enhance its penetration.
The insurance costs may vary depending on our driving habits, including how often, where, and how much. These situations are covered by the “Pay as you Drive” policy. The way we drive may also enable us to drastically reduce the cost of our auto insurance.
There are now two categories of car insurance coverage: comprehensive insurance and TP liability insurance. A complete auto insurance package comprises TP liability as well as an OD cover, which pays for any expenses the insured incurs as a result of car theft or an accident.
The advantage of purchasing a comprehensive vehicle insurance policy is that add-on plans and riders allow the policyholder to receive additional benefits without purchasing additional policies. Every vehicle owner is required by law to carry TP liability insurance. It safeguards the policyholder’s interests from harm the policyholder may inflict to someone or something (such as property).
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