Pay as you drive, how you drive: IRDAI's new motor insurance rules
Forget high rates of vehicle insurance rates. Insurance regulator IRDAI has made it sure that vehicle owners can now decide how much to pay for vehicle insurance with the announcement of new rules on Wednesday, which have been implemented with immediate effect. The insurance regulator has now permitted general insurers to issue sophisticated add-ons, which will allow one to reap benefits of driving habits. It includes features like Pay As You Drive and Pay How You Drive. The telematics-based motor insurance plans will modify premium amount based on the usage of a vehicle or driving habit.
The IRDAI has also made a big announcement that if an owner has more than one vehicle, he or she can get coverage with only one insurance premium through the new rules using the telematics-based motor insurance plans. The premium on insurance will also depend on the number of vehicles one drives.
"The Concept of Motor Insurance is constantly evolving. The advent of technology has created a relentless pace for the insurance fraternity to rise up to interesting yet challenging demands of the millennials. The general insurance sector needs to keep pace with and adapt to the changing needs of the policyholders," IRDAI said in a statement.
IRDAI has approved new insurance products to general insurance companies. According to the new motor insurance rules, one can fix the premium amount on insurance based on distance a vehicle runs on a regular basis. One can avail the usage-based cover and reap benefits if the vehicle is used less frequently. Once can also fix the maximum distance the vehicle will be driven in a month to decide the premium rate.
According to the insurance regulator IRDAI, bad or rash driving will attract a higher premium.It said that the driving pattern of a vehicle will be monitored through Global Positioning System or GPS.A small device will be fitted in a mobile app or vehicle, which will share this information.Apart from this, with the help of GPS, the insurance company will know the driving pattern of a particular vehicle too.With the help of technology every vehicle will earn a driving score that will decide the premium to be paid by the owner.