People who have bought an automobile in recent years will know that motor insurance is costly, with a fixed premium that needs to be paid every year. But now, the Insurance Regulatory and Development Authority of India (IRDAI) has revealed a new set of motor insurance rules that will allow the user to pay for insurance as per their automobile usage, under ‘Pay as you drive, pay how you drive’ and floater policy for vehicles belonging to same individual owner for private cars and two-wheelers.
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(Motor insurance could become more affordable with the new rules)
In a notification, the IRDAI said that these technology-enabled add-ons for own damage (OD) motor insurance seeks to offer flexibility to automobile users, enabling them to pay for insurance based on their driving history, with general insurers offering a dynamic insurance cover. The floater policy will allow individuals who own more than one vehicle to get a single insurance cover for all their motor vehicles. Of course, the telematics-based motor insurance plan will also impact the premium, with safer driving and lesser driving leading to lesser premiums. This is likely to benefit the entire automotive insurance eco-system.
(Automotive insurance premium could change with the new set of rules)
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“This is a very welcome step in the direction of a larger goal of incentivising better driving behaviour on Indian roads. While, for the now, you may pay only for your drive, the eventual goal will be to ensure a lower insurance premium when we adhere to road and safety norms. Entire ecosystem, be it insured, insurance companies and partners will get benefitted from this in long term”, said, Vivek Sharma, Founder & CEO, Fixcraft.
“The Concept of Motor Insurance is constantly evolving. The advent of technology has created a relentless pace for the insurance fraternity to rise up to interesting yet challenging demands of the millennials. The general insurance sector needs to keep pace with and adapt to the changing needs of the policyholders,” IRDAI said in a statement.