IRDAI Allowed Add-Ons to Motor Own Damage (OD) Policy

On July 06, 2022, The Insurance Regulatory and Development Authority of India (IRDAI), in its press release, permitted all general insurance companies to introduce the following tech-enabled concepts as add-ons for the Own Damage (OD) motor insurance cover:

1. Pay as you drive
2. Pay how you drive
3. Floater policy for vehicles to the same individual for two-wheelers and private cars

The add-on cover “Pay as you drive” will help the insured vehicle owner to pay premium based on the usage of his vehicle. Premium will be charged based on the kilometres covered. A Lower premium will be charged to the vehicle owner who spends less time on the road compared to the owner who drives a lot.

“Pay how you drive” add-on will depend on the manner the owner drives the insured vehicle. The insurer will use the “driver-based” and not the “asset-based” parameter to charge the premium. Less premium will be charged to the policyholder who drives safely. A higher premium will be charged to the vehicles with more fines and accidents.

With the “floater policy” add-on, vehicle owners can buy a single (floater) policy for more than one vehicle. A person having more than one vehicle (for both two-wheeler and four-wheeler) does not need to buy separate policies for each vehicle.

According to IRDAI’s press release, these add-ons “will aid in giving the much-needed fillip to Motor OD Insurance in the country and increase its penetration.”

Benefits of Add-Ons to Motor OD Cover

1. These add-ons will give protection to the policyholders based on the driving pattern. The premium will be charged according to how, where, and when the policyholder drives.
2. The add-ons will make motor insurance more affordable to the policyholders.
3. The introduction of tech-enabled concepts will encourage vehicle owners to follow traffic rules and drive safely. This will lead to a reduction in road accidents in the long run.

Go ahead and buy add-on cover to customize your own damage motor vehicle insurance policy.

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