IRDA allows insurance companies to introduce modern additional features for auto insurance.
New Delhi, Jul 6 (PTI) The Insurance Regulatory and Development Authority of India (IRDA) on Wednesday allowed general insurers to introduce advanced features of additional benefits and comprehensive protection cover for vehicle insurance policies.
These are telematics based motor insurance plans for which the premium depends on the mode of use or driving of the vehicle. In the auto insurance industry, telematics is useful for tracking, storing and transferring ‘driving’ data. These data are useful in understanding driving behavior and deciding appropriate auto insurance rates.
In a statement, IRDA said, “The concept of auto insurance is constantly evolving. With technology the pace to meet the challenging demands of the new young generation has increased at a rapid pace. The general insurance sector needs to keep pace with and adapt to the changing needs of the policyholders.
As part of its constant endeavor to protect the interests of policyholders and widen the insurance coverage in the country, the regulator has eased things up to help the industry grow with the times.
IRDA has taken a step towards facilitating technology enabled insurance cover. Under this, the regulator has allowed general insurance companies to offer a technology-led concept for ‘Motor Own Damage’ (OD) ie damage cover of their vehicle. This includes ‘Pay As You Drive’ and ‘Pay How You Drive’.
‘Pay as you drive’ and ‘pay how you drive’ are vehicle insurance models. It allows policyholders to customize their insurance policy up to a limit. This helps in reducing the premium.
‘Pay as you drive’ is a comprehensive motor plan where the premium will depend on the use of the vehicle while the ‘pay how you drive’ premium will be linked to the driving behaviour.
The regulator has also allowed a ‘floater’ policy for multiple vehicles of the same owner. It is a single vehicle insurance plan which covers multiple vehicles.
