The Buyt Desk
If your driving frequency is less, the Insurance Regulatory and Development Authority has brought something for you that will cheer you up. The regulator has given a green signal to insurers to introduce concepts like Pay as You Drive, Floater policies and Pay How You Drive.
Better Driving, Lesser Premium
less you drive the less you pay and the better you drive lesser you pay- the insurance premium could be decided will be based on the distance that you drive and how you drive. These policies will let you set the mileage limit for your vehicle and get discounts on the premium based on different factors. For lower limits, there will be higher discounts.
Club all your Vehicle Insurances into One
Coming to the floater policy is similar to the floater health insurance policy. Just like a health insurance policy covers all family members, the vehicle floater policy will cover all the vehicles in a family. So, suppose if an individual has multiple vehicles registered in his name, he can take one insurance to cover all of them. A two-wheeler and a four-wheeler can be clubbed and covered in one policy. However, its effectiveness on vehicles registered in different individual names living in the same family is yet to be revealed.
How Will It Monitor Your Driving and Distance?
The proposed policy, ‘Pay How You Drive’ would allow users to get a discount on insurance premiums based on their driving quality. To evaluate this a device (Telematics) will be fitted in the vehicle that will monitor the vehicle conditions and driver’s driving habits. The data that will come from the device will be used to interpret the driving skill of the user, and based on that driver will receive discounts on premium. If you drive for short distances and are not a frequent car user you will pay as per the distance covered by you. Under the Pay as You Drive policy, the users do not have to shell out to pay the complete premium if they are not using the vehicle much. On the other hand, the move would make those users spend a little extra on the premium whose driving requirement is higher than formers.
How is it a Win-Win For Both Customers & Insurance Companies?
The idea behind approving these products is to attract more customers for taking insurance, and insurance companies could penetrate deeper into the market. According to the experts in the vehicle insurance industry, this is a positive and welcoming move from IRDA. All customers do not similarly use their vehicles. Some users drive when they plan road trips or go for a family outing, while some use vehicles more frequently like to commute to the office, manage day-to-day work, etc. Fixed insurance takes all types of customers under one umbrella. The proposed add-ons will segregate vehicle users based on how much they drive and how they drive and benefit them accordingly. Additionally, industry experts anticipate that the proposed policies will encourage users with lesser driving needs to get their vehicle insured.
According to the study, a high percentage of users prefer not taking vehicle insurance because of their lesser driving needs. The move will also inspire people to be more careful while driving.
