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:
- Pay as you drive
- Pay how you drive
- 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
- 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.
- The add-ons will make motor insurance more affordable to the policyholders.
- 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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