How much and how safely you drive could soon affect how much you pay for auto insurance. The Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurers to offer pay-as-you-drive car insurance premiums based on mileage and driving style. # ##
The pay-as-you-go insurance plans let customers establish a mileage cap for their vehicles and provide reductions over the standard cost. The savings over the standard premium is greater the lower the limit. Only the limit that the buyer selects will be covered by the insurance. Insurance providers offer three slabs of 7,500 km, 5,000 km, and 2,500 km. ##
The insurance regulatory body has also suggested floating car insurance. Vehicle owners can cover multiple vehicles under a single policy, just like floater health policies do for the entire family. Floater policies are fairly common in health insurance, but it’s uncertain whether they’ll replace other options as the standard in vehicle insurance. The fact that a family’s vehicles are typically registered under many names could provide a problem for such floater insurance.
Additionally, IRDAI has permitted insurance providers to give concessions based on a driver’s skill level. The user’s driving patterns and the vehicle’s condition are tracked by a telematics device installed in the automobile. After that, this information is evaluated to offer cautious drivers concessions. It may also punish reckless and careless drivers. These improvements look like excellent news for those who own many vehicles or have not been driving as much owing to Covid limitations. They won’t have to pay the entire price if they don’t use their cars too frequently. Introducing these options will give the motor’s own damage cover the much-needed fillip in the country and increase its penetration. # *
The insurance sector has applauded the action, as was expected. This is a revolutionary advance in the field of vehicle insurance. It will increase the demand for utility-based insurance and promote safe driving practices. The IRDAI has established a win-win circumstance here. #
The good news is that customers who drive more than the slab restriction can upgrade to a higher slab or even a conventional unlimited policy. But before the threshold limit is reached, this upgrade should be made. Upgrades are not available following an accident or claim incident.
A vehicle insurance calculator is a convenient tool you can utilise online to check the coverage required based on your needs.
The potential savings with a Pay-As-You-Drive motor insurance policy can vary significantly based on individual driving habits and circumstances. By embracing this innovative approach to auto insurance, many drivers have found the opportunity to reduce costs, promote safer driving habits, and contribute to a more sustainable environment. However, the exact amount of savings will depend on factors such as mileage, driving behavior, and the specific terms of the insurance policy. It’s a promising option for those seeking greater control over their insurance expenses while encouraging responsible driving practices.
* Standard T&C Apply
# Visit the official website of IRDAI for further details.
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.