The Insurance regulator has made sure that vehicle owners can now decide how much to pay for vehicle insurance. They have now permitted general insurers to issue sophisticated add-ons in accordance with their daily usage of insured vehicles, and driving habits.
It will include features like Pay as You Drive and Pay How you Drive. The telematics-based motor insurance plans will modify the premium money based upon the usage of a vehicle or driving behavior.
They also made it clear that if an owner has more than one vehicle, they can get coverage with only one insurance premium as per the new rules via telematics-based motor insurance plans. The premium will also depend on the number of vehicles one drives.
IRDAI has also approved new insurance products for general insurance companies. One can also fix the premium amount based on the distance a vehicle runs on a regular basis, as per the new rule. However, one can enjoy the usage based cover and reap benefits if the vehicle is used less frequently. Additionally, owner can also decide the premium amount to be paid based on the distance driven in a month.
Bad or rash driving will attract a higher premium. It will be monitored with a Global Positioning System or GPS. A small device will be attached to a mobile app or vehicle which will share this information. With the help of GPS, every vehicle will earn a driving score that will decide the premium amount.