The Insurance Regulatory and Development Authority of India (IRDAI) has permitted general insurers to introduce technology-enabled add-ons to motor own damage (OD) insurance cover.
Pay-as-you-drive, pay-how-you-drive and floater policy for vehicles belonging to the same individual owner for two wheelers and private cars are add-ons it has allowed. These will be provided as add-ons to the basic policy of Motor OD and are expected to give much-needed fillip to the cover in the country and raise penetration, the insurance regulator said on Wednesday.
The objective in allowing such covers is that motor insurance essentially becomes more affordable, especially for customers who primarily opt for only third-party (TP) insurance and overlook the benefits of OD covers. Such initiatives are a push in the right direction in increasing the much-needed penetration of motor insurance in the country, chief technical officer of Bajaj Allianz General Insurance T.A. Ramalingam said.
With the latest IRDAI circular, the insured can also purchase one add-on motor cover on a floater basis for multiple vehicles he/she owns, be it four-wheelers or two-wheelers, he said.
Reliance General Insurance CEO Rakesh Jain said: “Every individual has different driving and vehicle usage patterns. With the new add-ons, OD policy coverage can be tailored based on a customer’s driving behaviour patterns, general upkeep [of vehicle], mileage and vehicle usage patterns to offer the best features they need. The premium will be determined as per an individual’s tailored coverage.”
Thus, opting for ‘Pay as you drive’ or ‘Pay how you drive’ add-ons, besides the conventional policy, will benefit customers who have low vehicle usage, who take care of their vehicles, follow traffic rules and maintain good driving behaviour. This will do away with the ‘standard premium for all’ practice and enable customers to avail of a premium as per their usage, consumption and other requirements, he said.
