Insurance Regulatory and Development Authority of India (IRDAI) said in a notification (Dt. 06 July 2022. IRDAI said general insurance companies can introduce own damage cover [ First Party Cover/Insurance] for motor insurance in three categories –
1. 'Pay as You Drive',
2. 'Pay How You Drive,' and
3. 'Floater Policy' for vehicles belonging to the same individual owner for two-wheelers and private cars.
'Pay
as you drive' add-on will allow customers to pay a
premium based on their usage. Let say if Vehicle “A” travels 100Km per month
and Vehicle “B” travels 1200Km per month then the Insurance premium for Vehicle
“B” will be more than Vehicle “A”. This will make Vehicle “A” Insurance premium
affordable.
'Pay how you drive' add-on will depend on the
driving behaviour of the owner. Vehicles with more fines and accidents will have to pay a higher premium.
A 'floater policy' will allow the vehicle owners
to get a single policy for multiple vehicles including two wheeler.
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 to the insurers server. Vehicle owner has to give permission to access vehicle trends and vehicle history of past accidents and other penalties etc. It is to note that AI and Data Analytics will play a vital role in retrieving the details from vehicles as an effort to technology-based product innovation. Additionally, the new move will encourage people to take care of their vehicles, follow traffic rules and maintain good driving behaviour.
