The Insurance Regulatory and Development Authority of India (IRDAI) has allowed general insurers to launch technology-enabled add-ons for Motor Own Damage (OD) insurance cover.
Pay-as-you-drive, pay-how-you-drive and floater policy add-ons for vehicles owned by the same owner for two-wheelers and private cars are what it has allowed. The insurance regulator on Wednesday said these will be provided as an add-on to the basic policy of Motor OD and are expected to give the cover the much-needed impetus and increase penetration in the country.
The purpose of allowing such covers is that motor insurance inevitably becomes more affordable, especially for customers who primarily opt for third-party (TP) insurance only and ignore the benefits of OD covers. Huh. TA Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance said such initiatives are a step in the right direction in expanding the much-needed reach of motor insurance in the country.
He said that with the latest IRDAI circular, the insured can also buy an add-on motor cover on floater basis for his multiple vehicles, be it a four wheeler or a two wheeler.
Rakesh Jain, CEO, Reliance General Insurance said: “Driving and vehicle usage patterns vary from person to person. With the new add-ons, OD policy coverage can be tailored on the basis of customer’s driving behavior pattern, general maintenance. [of vehicle], mileage and usage patterns of the vehicle to provide the best features that they require. The premium will be determined as per the coverage tailored to the individual.
Thus, in addition to the traditional policy, opting for a ‘pay as you drive’ or ‘pay how you drive’ add-on will benefit customers who have low vehicle usage, who take care of their vehicles, follow traffic rules and so on. obey and maintain good driving behavior. , He added that this will do away with the ‘standard premium for all’ practice and enable customers to avail premium as per their usage, consumption and other requirements.